How the budget affects us:
With income tax up by hundreds of pounds a year and homeowners hit with £1,000 energy bill rise and likely council tax to spike, but pensions and benefits are up 11% and living wage passes £10 an hour.
Jeremy Hunt unveiled the autumn statement today and adding to the financial gloom of millions of Britons with a swathe of tax rises.
The average family is likely to be more than £800 a year worse off after he unleashed an expected wave of tax changes designed to rake in £24billion for the Treasury.
Under plans announced today he will increase the income tax on millions of workers. He also sets up for increases in council tax bills by easing the rules for local authorities to obtain more cash to pay for services.
At the same time, he confirmed that help with soaring energy bills is due to be reined in. Previously, Liz Truss's plan was to underwrite all bills for two years will end after just six months and be replaced with targeted, cheaper, assistance aimed at those least able to pay.
It means families will be paying £1,000 extra by next spring. But he also unveiled moves to make the moist well-off pay more tax, a move broadly supported by the public according to a poll this week.
He also confirmed that pensions and benefits will rise in line with September's inflation rate of 10.1 per cent. Rishi Sunak this week talked about pensioners were 'at the forefront of my mind' and Jeremy Hunt today continued to as he protected age-related benefits from inflation.
The Chancellor confirmed that the 'triple lock' ,designed to ensure the value of the state pension was not overtaken by the increase in the cost of living or the working population's income, would be retained. With inflation currently at an eye-watering 11.1 per cent that means that keeping the lock will cost billions in extra pay-outs for the elderly, but alongside this he also announced a review of the current state pension age of 66.
Members of Mr Sunak's Cabinet including Michael Gove have previously warned against going back on the manifesto commitment, which could have been unpopular with older, predominantly Tory voters. State pensions increased by 3.1 per cent this year, after the triple lock was suspended for a year.
However, it is not all good news for pensioners. Along with working age homeowners they face an increase in energy bills, set to rise from an average of £2,500 to £3,000 in April as Government aid is tapered off over the course of a year.
That is almost treble the £1,042 average bill in April 2020, which has been sent rocketing by the impact of the war in Ukraine on gas supplies.
Additionally, a universal one-off payment of £400 this winter will not be repeated, meaning millions will be an average of £900 worse off in total.
WORKING-AGE HOMEOWNERS HIT WITH TAX RISES AND BILL INCREASES
Middle income families with mortgages were hit by the forecast perfect storm of tax rises - personal and probably on their homes - alongside an energy bill increase and cuts to child benefits.
The three main tax rates - 19p basic, 40p higher and 45p additional rate - will not change, as that would be politically dangerous, but it is the thresholds at which rate kicks in that are expected to be where workers lose out - as many as three million of them.
Currently workers earning between £12,570 and £50,270 pay the basic rate of income tax, but wage inflation is currently running at 6 per cent. This means that as wages rise to deal with increases in living costs (CPI inflation is currently at 10.1 per cent) then more middle income workers will be dragged into the 40p rate bracket.
The tax thresholds were frozen until 2026, but Mr Hunt extend this until 2028. It is expected to cost someone on £50,000 an extra £1,893 a year by the time the freeze comes to an end. He abandoned plans to reinstate Labour's 50p top tax rate – but will still hammer higher earners by reducing the income level at which the top 45p rate kicks in from £150,000 to £125,000, dragging more people into the tax bracket.
But those aged between 40 and 64 are set to benefit the most from cost-of-living support measures announced this year because cuts to national insurance contributions do not benefit those over the state pension age.
YOUNGER RENTERS WILL STRUGGLE MOST WITH BILLS
There was little good news for younger renters in the statement. They will be affected by income tax rate threshold freeze the same as everyone else of working age and they are likely to bear the brunt of changes to energy bills help.
Increases to council tax will also affect them, both directly, and indirectly if landlords factor rises into their rent.
The Resolution Foundation's Intergenerational Audit found that younger generations, who have seen years of stalled pay growth and high housing costs, will struggle the most as they are four times more likely to be on pre-payment meters and are less likely to have assets and savings that could see them through.
BENEFIT INCREASE AND MINIMUM WAGE RISE FOR THE LOWEST EARNERS
Ministers had faced pressure to make sure that the Autumn Statement is fair and does not leave the poorest the worst off. So, several measures were introduced to help though at the bottom to help both with the cost of living and the Tories' own political crisis.
The first was a decision to raise benefits in line with inflation, so they rise by 10.1 per cent, the inflation rate in September. There is also a significant increase in the national living wage - from £9.50 an hour to £10.42 - meaning a pay rise of around £1,600 per person. He also confirmed cost-of-living payments to around eight million households on means-tested benefits.
Those on universal credit could receive £650, disability benefit recipients £150 and pensioner households £300 - with some people able to claim all three. More than four million children are living in families which receive Universal Credit, latest figures suggest.
