Phillip Hammond has delivered his first Autumn Statement since becoming Chancellor. Here’s how the 2016 Autumn Statement affects you.
Increase in the National Living Wage
There will be a 30p increase in the National Living Wage from April 2017. This applies to all workers aged 25 and over. You can check if you’re getting the National Living or Minimum wage using the gov.uk site.
Upfront letting agent fees
For those renting in the private sector, upfront fees are something that renters will be used to. While the Chancellor is looking to ban such fees, there is a chance that these costs may be passed on to renters through higher rental costs.
Universal Credit earnings taper rate lowered
For every pound you earn over the work allowance, if you are eligible for one, you will now keep 37p – an increase of 2% from April 2017.
Insurance Premium Tax
Premiums on insurance will rise from 10% to 12%. Meaning your car and home insurance will go up from June 2017.
Clampdown on whiplash claims
A crackdown on fraudulent injury claims, the government say, will save typical insurance premiums around £40.
Salary sacrifice schemes
Salary sacrifice schemes, which allow you to pay for benefits through salary, normally mean that you pay less tax and national insurance (NI). These benefits normally include car schemes, mobile phone contracts and other benefits. As of April 2017 the benefits that qualify may be subject to higher tax and NI contributions. This excludes pensions, childcare and cycle to work schemes.
Ban on pension cold calling
Getting cold calls for anything can be irritating. But the Treasury had confirmed that the Autumn Statement would, and it did, include a ban on cold calls for pensions. Those who ignore the ban will receive fines of up to £500,000.
Changes to tax allowance and benefits coming soon
Changes to specific benefits and tax allowances were announced before the 2016 Autumn Statement. Here’s a quick recap of what you need to keep an eye out for.
In the last few weeks the new Benefits Cap has come in to force. This means that households, under certain circumstances, won’t receive more than £23,000 in benefits. Or £20,000 for households outside of Greater London.
Personal Tax allowance
At the moment you can earn up to £11,000 per year and not pay tax. As of April 2017 this increases to £11,500.
Child Tax Credit changes
From 6 April 2017, most people will only get the child element of Child Tax Credit for up to 2 children. You’ll still be able to claim it for more than 2 children if they were born before 6 April 2017.
30 hours free childcare
In less than a year, parents of children aged three or four will be entitled to an extra 15 hours free childcare. This is in addition to the current 15 hours childcare that all three and four-year-olds receive. You’ll qualify for the additional 15 hours if both parents (or the sole parent in a single parent family) are working and earning the equivalent of at least 16 hours a week at the national living or minimum wage. Both parents’ combined income must be less than £100,000 per year to qualify for the full 30 hours free childcare.
You may have to pay for additional nursery services including meals on top of the free allowance.
Due to be launched in April 2017, a Lifetime ISA, or LISA, can be used as a savings fund for first-time buyers or towards retirement. You can save up to £4,000 a year and get a government bonus of 25%.
If you decide to withdraw the money before retirement, or not use it to buy your first house, you won’t get the government bonus or interest. You’ll also face a 5% charge as well.