What are the key points from the Autumn Statement and how will they affect you?
On the afternoon of the 23rd November, Chancellor Philip Hammond gave his first Autumn Statement in which there were major announcements with big implications for housing, tax and savings. Here are some of the main talking points from Wednesday’s announcement…
Taxation
- The income tax threshold will be increased from £11,000 to £11,500 from April next year
- The higher rate income tax threshold will also increase to £50,000 by the end of Parliament
- The National Living Wage will rise from £7.20 to £7.50 from April next year
Housing and Property
- Letting agent fees will be banned in England. The ban will be implemented “as soon as possible”
- 40,000 affordable homes will be built with £1.4bn being pledged to help achieve this
- £2.3bn will be set aside for housing infrastructure to help build 100,000 new homes in high demand areas
Insurance
- Insurance premium tax will increase from 10% to 12% from June next year
- Vehicle insurance, home cover and other insurance products could rise in cost as a result
- Plans are in place to cut whiplash claims. This could result in a £40 annual insurance reduction, however insurance tax increases could wipe this out, and even add further costs
Savings
- National Savings and Investments will be launching a new savings bond with an expected interest rate of around 2.2%
- The bond will be open to those aged 16 and over with a minimum investment of £100 and a maximum of £3,000
- Savers must commit their money for three years. The best interest rate on three year bonds is currently 1.62%, so this new product is a reasonable improvement
Pensions
- The annual tax-free allowance will be reduced from £10,000 to £4,000 for those that take money from their defined contribution pension pots
- The aim is to prevent people from “recycling” their pensions by drawing from their pot tax-free, then putting it back in to gain extra tax relief, but this may result in problems for those that wish to access their pensions flexibly
For more analysis on how the Autumn Statement will affect you, visit the BBC website.
