Winners and losers of Jeremy Hunt’s 2023 Autumn Statement

Voters such as young people, parents and pensioners will be wanting to know how the Chancellor's Autumn Statement will affect their finances

Jeremy Hunt, the Chancellor, delivered his Autumn Statement this afternoon. We explain who can expect to gain financially from his announcements – and who is likely to lose out.

Winners

Taxpayers

While income tax rates were left unchanged, Mr Hunt cut National Insurance – income tax by another name. The main rate will fall from 12pc to 10pc on Jan 6. Twenty-seven million people will benefit; someone who earns the average wage of £35,000 a year will save £450 a year.

The self-employed will have their National Insurance contributions cut from April next year. “[It will be] a tax cut of £350 for the average self-employed person earning £28,200 a year,” the Chancellor said. Class 2 NI is to be abolished; Class 4 contributions will be cut by one percentage point.

Isa savers

Savers and investors will be able to open more than one Isa of the same type each year. The Government also intends to permit fractional shares to be held in Isas, which will make it easier to invest in companies whose share price has risen strongly. A single share in AstraZeneca, for example, costs about £100, while a share in Warren Buffett’s company, Berkshire Hathaway, costs about $548,000.

Investors in shares

Mr Hunt is to allow companies to claim more generous tax breaks when they invest in assets such as machinery. All else being equal, their lower tax bills should mean bigger profits for investors.

Russ Mould of AJ Bell, the investment company, said: “The Office for Budget Responsibility quantified the tax benefit at £9bn a year in March. Aggregating stockbrokers’ profit forecasts for individual FTSE 100 companies for 2023 gives £171bn in total and £183bn for 2024. So £9bn of that is 5pc of forecast net profits for 2024.

“The caveat is that the FTSE 100 is not all of UK plc and a big chunk of its assets, and thus investment, will be overseas, but my figures may serve as a rule of thumb.”

In addition, Mr Hunt extended business rate relief, which should also ultimately benefit investors in the retail and hospitality sectors.

He said he would investigate a sale of shares in NatWest, which is partly owned by the state, to the public. “We’re exploring options for a retail offer of NatWest Group shares as part of plans to reduce the Government’s stake,” he said.

“A deeply discounted offer price could make the shares attractive to investors,” said Mr Mould.

Landlords

Property investors can expect to benefit from the rise in housing benefit in line with inflation announced by the Chancellor. Landlords will also be given an automatic right to convert properties into two flats.

Pensioners

State pensions will rise by 8.5pc, in line with the normal measure of earnings. Stripping out the effect of bonuses from the figures had been considered; it would have meant a lower increase of 7.8pc.

The full new state pension will therefore increase from £203.85 a week to £221.20, or £11,502 a year. The decision means that the “triple lock” will be adhered to.

The low paid

The National Living Wage is to increase by more than £1 an hour to £11.44 an hour from April. It is currently £10.42 an hour for workers aged over 23. Mr Hunt said the rate will also apply to 21 and 22-year-olds for the first time. It means a full-time worker aged 23 on the minimum wage will receive a rise of £1,800 a year. A 21-year-old will see an effective £2,300 annual rise.

Higher earners

Up to 338,000 taxpayers will no longer have to submit a tax return every year after the Government changed the rules for higher earners.

The Government used to require those earning more than £100,000 to file for self assessment, even if they had no additional income outside employment. The threshold was raised to £150,000 in April and has now been abolished entirely from 2024-25.

Drinkers

All alcohol duty in frozen until August next year.

Pension savers

The Government will consult on plans to allow workers to choose the company that manages their workplace pension so that they can avoid ending up with multiple pots when they move job.

Benefit claimants (but see also ‘losers’)

The Chancellor confirmed that he would increase benefits in full by 6.7pc, in line with September’s inflation figures, after considering using October’s lower figure of 4.6pc.

National Insurance calculator

Find out your new take-home pay

Read more

Losers

Higher-rate taxpayers and those close to the threshold

The freeze on income tax thresholds has combined with wage rises to drag many more workers into higher tax bands. No respite came from Mr Hunt today.

Bereaved families

The Chancellor did not change inheritance tax allowances, which remain frozen.

Benefit claimants

The Autumn Statement included major reforms to force more benefit claimants to look for jobs. It closed loopholes to the work capability assessment that enable hundreds of thousands of people to evade work by claiming they have problems such as anxiety.

From 2025, people with mobility and mental health problems will be told to look for work that they can do from home – and could lose thousands of pounds a year if they refuse. A £2.5bn Back to Work Plan will help up to 1.1m people with long-term health conditions, disabilities or long-term unemployment to look for and stay in work, with tough new benefit sanctions for those who can work but choose not to.

Smokers

Smokers of roll-up cigarettes will pay almost a fifth more for tobacco after Jeremy Hunt increased the duty on rolling tobacco by 17.4pc. A 30-gram pack of tobacco that previously cost £20 will now cost £23.48. The rise is equivalent to Retail Price Index inflation plus 12pc. Smaller duty increases of RPI plus 2pc were made for other forms of tobacco, including cigarettes and cigars.

Recommended

Chancellor confirms state pension triple lock – this is how much you'll get

Read more