Autumn Statement: the latest announcements explained

Published  23 November 2023
   5 min read

On Wednesday 22 November 2023, 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, my name's Clare Moffat and I'm a pensions expert at Royal London.

So, the Autumn Statement has happened, and in two minutes what was in it and what does it mean for you?

Well, the good news for pensioners is that the State Pension will increase by 8.5% in line with the triple lock. There was a suggestion that a lower wages figure might be used, but that hasn't happened.

So that means from April, someone receiving the full State Pension well they'll get an extra £900 a year.

Now there's also going to be reduction of 2% on National Insurance for employees, which is about a saving of £450 a year for someone on the average salary of £35,000. For self-employed it's a reduction of 1%.

But there's a fixed amount of £3.45 a week which needs to be paid in Class 2 National Insurance contributions for state benefits and that won't need to be paid either.
Now the Chancellor said that meant a total average saving of around £350 for someone who's self-employed. Now these changes start from 6 January.

So this will benefit those who are working and below State Pension age, that's because if you're still at State Pension age you don't pay National Insurance.

Now what we did see and a bit more unusual was more around pensions. Now some of this was about how pensions could help solve economic problems. The Chancellor mentioned that there would be a consultation on something called pot for life.

Now the proposal is that people would keep one pension for life rather than joining pension schemes as they move job to job. Now that sounds really simple, but it's actually hugely complicated especially for employers. So we look forward to discussing that with government.

But what didn't we see? Well, although any tax saving is good, like the National Insurance saving, more and more people have been moving into higher tax brackets. Now that's because the tax thresholds, higher rate for example, have stayed the same. And the personal allowance, well it's still frozen too so that means more and more people will be brought in to paying tax.

Now our recent cost of living research found that the average food and household bills have gone up by £500 a month this year compared to last year.

So while there's some positivity to be taken from the Chancellor's announcement today, it's still a challenging time for many and some will certainly struggle without the support for energy bills that was in place last winter.

Now I hope you found that useful, thanks for listening!