The Autumn Statement - what it means for you

Published  18 November 2022
   5 min read

On Thursday 17 November 2022, the government announced the Autumn Statement.
In our latest video, pensions and legal expert Clare Moffat, explains how it could impact you.

The Autumn Statement

Hi, I'm Clare. The Chancellor has now delivered his Autumn Statement, so what could this mean for you?

Well, the Chancellor said it would impact those with the broadest shoulders the most. So did it?

There is good news for those receiving State Pension. The State Pension will rise by the consumer prices index inflation measure of 10.1%. So that means weekly payments for the new State Pension will increase from £185.15 to £203.85 from April 2023. And that means the annual State Pension will be over £10,600.

Maybe not so good news is that the State Pension age rise review will be published next spring and it could bring forward the timetable for increasing the State Pension age to 68 and potentially beyond.

Income tax. Well the personal allowance and the point at which you pay higher rate tax, well it's being frozen. That means you might just be below the personal allowance or the higher rate tax band now, but you might receive a pay rise perhaps to help with the cost of living and that could actually mean you end up paying more tax.

Now, households are already contending with higher mortgages, bills, and rising food costs, and that means a further chunk of their income is going to be taken by the government.

If you do find yourself paying a higher rate tax than before, then more tax relief is potentially available to you through your pension. So that means you could pay a pension contribution, and that acts as a tax reducer and that could mean you could be brought back into the basic rate band for example.

Now the threshold that which people start paying the 45% income tax rate, well it's decreased from £150,000 to £125,140. So that means that more higher earners are going to be paying 45% tax.

The inheritance tax threshold has also been frozen from an additional two years, meaning it's going to be frozen until 2028. So, what is inheritance tax? Well that's the tax that's paid by your estate on death if your assets are more than something called the nil rate band.

Keeping it at the same amount for a further two years just means more and more people will be paying inheritance tax, perhaps because of the rise in house prices or the value of other assets. Again it's something that raises a lot of money for the government.

On the energy front, well there will be more targeted help for those on the lowest incomes. But of course higher energy costs are impacting everyone. In April 2023, the energy price cap will increase from £2,500 to £3,000 for a typical household. That's more than 20% than people are currently paying.

So that's the main points from the Autumn Statement.