Autumn Statement 2023 - Highlights

With inflation having fallen to 4.6% last month and tax revenues up, the government sought to utilise its fiscal headroom on 22 November to unveil an 'Autumn Statement for growth'.

Chancellor Jeremy Hunt took to the despatch box in the House of Commons to announce a series of tax and spending plans for the months and years ahead – here are the key highlights:

Pensions

• The triple lock is once again being maintained for pensioners meaning the state pension will rise by 8.5% in April 2024. People on the full, new state pension will get an additional £902 in the year from April 2024, while those who reached state pension age before 2016 will see theirs grow by £692 per year.
• The government will tackle the long-standing problem of “small pot” pensions and is launching a call for evidence on a lifetime provider model which would allow individuals to have contributions paid into their existing pension scheme when they change employer, providing greater agency and control over their pension and simplifying retirement saving for workers.
• The Lifetime Allowance remains on track to be abolished in April 2024, via legislation in the Autumn Finance Bill 2023.

ISAs

• From April 2024, the government will allow multiple subscriptions to ISAs of the same type every year (previously you could only have one of each) but subject to the overall ISA allowances. The government will also allow partial transfers of ISA funds per year between providers.

Wages

• With the National Living Wage already having increased by 12% earlier this year to £10.42 an hour, the Chancellor revealed it will receive another 9.8% jump to £11.44 from April 2024. For the first time, this amount will also be applied to workers aged 21 and 22. The National Minimum Wage for those aged 18-20 will increase by 14.8% to £8.60 an hour, while for 16-17-year-olds and apprentices, it will jump 21.2% to £6.40 an hour.

Taxes

• National Insurance will also be cut for self-employed workers, who currently have to pay Class 2 NIC (£3.45 per week if your profits are above £12,570) and Class 4 NIC (9% on profits between £12,570-£50,270 and 2% on profits over £50,270). The government is abolishing Class 2 NIC altogether while also reducing the 9% band of Class 4 NIC to 8%. 
• Employed workers will see the National Insurance they have to pay on income between £12,570 - £50,270 reduced by 2%, from 12% to 10%. Rather than wait until the new tax year to implement, the Chancellor said he will introduce emergency legislation to roll out the tax cut from 6 January 2024.

Businesses

• In what the Chancellor called the “largest business tax cut in modern British history”, he announced that ‘Full Expensing’ will be made permanent. This tax break allows companies to claim 100% capital allowances on qualifying investments in IT equipment, plant and machinery. 
• Much of the Autumn Statement focused on supply-side reforms to stimulate business growth. Other announcements in this area included a freeze to the small business multiplier, an extension of the 75% business rates relief for hospitality, retail and leisure firms, and tougher regulation on those that pay SMEs late. The Chancellor called the plans the “biggest ever boost for business investment in modern times”. 

Read the full Autumn Statement 2023 here