On Wednesday 30th October, the Autumn Budget for 2024 was announced by Chancellor of the Exchequer, Rachel Reeves.
Tax changes were expected, as well as changes to the national minimum wage, national insurance payments, fuel prices, housing and energy bills. But, what does this mean for you and your finances? Keep reading for a summary of the key points.
Income Tax
It was announced that the current rates of income tax will stay the same. From 2028-2029, the threshold for income tax and national insurance payments will increase in line with inflation. This will stop people from being placed in higher tax bands.
The Minimum Wage
- From April 2025, the national minimum wage (the legal minimum for workers aged over 21) will increase by 6.7% to £12.21, which is equivalent to £1,400 a year for an eligible full-time worker.
- To make pay the same for workers aged under 21, there will eventually be a single-adult rate introduced gradually.
National Insurance
Starting from April 2025, employees will not pay more National Insurance directly.
Fuel Duty
The freeze on fuel duty has been extended for one year, staying the same as the last government’s 5p cut.
Pensions
Basic and new state pension payments will increase by 4.1% next year.
Housing
- £5 billion will be spent on housing investment between 2025 and 2026, including spending more to make houses more affordable.
- ‘Right-to-buy’ discounts will be lowered and local governments will keep the earnings from the sales of council homes so they can put this money back into more houses.
- The new government has promised to hire hundreds of new planning officers to build more houses.
Energy Bills
- £3.4 billion will be spent on the warm homes plan to upgrade buildings, making energy bills lower.
- The government will put money into Great British Energy, a new company which will be based in Aberdeen.
The NHS
- The government has promised a 10-year plan for the NHS in the spring.
- There will be a £22.6 billion increase in the day-to-day health budget and a £3.1 billion increase in the capital budget (used for maintaining NHS buildings and equipment), which includes £1 billion for repairs and upgrades, and £1.5 billion for new hospital beds and more testing capacity.
Schools & Education
- £6.7 billion will go to the Department of Education, including a £1.4 billion spend on rebuilding schools in the most need.
- £2.3 billion more will be spent on hiring more teachers.
- £300 million more will be spent on school maintenance, putting £2.1 billion towards it.
- £1 billion more will be spent on funding for special needs children.
- £300 million more will be spent on colleges and universities.
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