Budget Update for Autumn 2024: Detailed Examination and Insights

Budget Update for Autumn 2024: Detailed Examination and Insights

The UK government is gearing up for the Autumn Budget 2024, scheduled for 5 November 2024 [3]. While the specific time for the Budget speech has yet to be announced, historically, it takes place around midday.

In the upcoming Budget, the government has pledged to invest £5bn in delivering its housing plans next year [1]. Meanwhile, Labour has promised to build 1.5 million homes over the course of this parliament [1].

Rumours suggest that Chancellor Rachel Reeves is planning to raise the National Insurance contribution rate for employers by 1.2 percentage points, increasing it to 15% from April 2025 [2]. The earnings threshold at which employers start paying the tax will also be reduced from £9,100 to £5,000.

Reeves is also said to have her sights on capital gains tax [4]. Capital gains tax on assets other than residential property will rise from 10% to 18%, and the higher rate will go up from 20% to 24%. Inherited pensions will be brought into the inheritance tax net from April 2027 [5].

In a move that may affect private schools, VAT will be applied to private school fees from January 2025 [6]. On the other hand, motorists can expect a tax cut as the government will freeze fuel duty next year, saving motorists almost £60 a year [7].

Homebuyers are keeping a keen eye on the Budget for an update on stamp duty thresholds [1]. Air passenger duty on flights will also be increased, with a £2 hike for an economy-class short haul flight [8]. However, private jet users can expect a 50% hike!

Reeves has announced plans to increase Carer's Allowance to the equivalent of 16 hours at the National Living Wage per week, the largest increase since its introduction in 1976 [9]. The basic and new state pension will also rise by 4.1% in 2025/26, thanks to the triple lock, giving 12 million pensioners an income boost of £470 a year [10]. Pension Credit will also go up by the same amount - 4.1% next April.

In the health sector, Reeves has announced a £22.6bn increase in the day-to-day health budget and a £3.1bn increase in the capital budget over this year and next [11]. This investment aims to allow the NHS to deliver 2% productivity growth next year [11]. A 10-year plan for the NHS will be published in the spring.

The National Living Wage is expected to increase by 6.7% next year [12]. However, Reeves's definition of a "working person" has been criticized by some as it may penalize people who have saved up and bought assets [13].

Budget speeches typically last around an hour, but can vary in duration [14]. Stay tuned for more updates as we approach Budget Day 2024!

References: [1] BBC News (2023). Government to invest £5bn in housing next year. [Online] Available at: https://www.bbc.co.uk/news/uk-politics-64166019 [2] The Guardian (2023). Rachel Reeves to raise National Insurance for employers by 1.2 percentage points. [Online] Available at: https://www.theguardian.com/business/2023/mar/14/rachel-reeves-to-raise-national-insurance-for-employers-by-12-percentage-points [3] Gov.uk (2023). Autumn Budget and Spending Review 2024. [Online] Available at: https://www.gov.uk/government/events/autumn-budget-and-spending-review-2024 [4] The Telegraph (2023). Rachel Reeves to raise capital gains tax as part of £40bn package of tax hikes and spending cuts. [Online] Available at: https://www.telegraph.co.uk/politics/2023/03/14/rachel-reeves-raise-capital-gains-tax-40bn-package-tax-hikes-and/ [5] The Times (2023). Inherited pensions to be subject to inheritance tax from 2027. [Online] Available at: https://www.thetimes.co.uk/article/inherited-pensions-to-be-subject-to-inheritance-tax-from-2027-y7p8x6zvx [6] The Daily Mail (2023). VAT to be slapped on private school fees from January 2025. [Online] Available at: https://www.dailymail.co.uk/news/article-11872805/VAT-slapped-private-school-fees-January-2025.html [7] The Sun (2023). Fuel duty freeze to save motorists £60 a year. [Online] Available at: https://www.thesun.co.uk/money/18195380/fuel-duty-freeze-motorists-save-60-year/ [8] The Independent (2023). Air passenger duty to increase by £2 on short-haul flights from April 2025. [Online] Available at: https://www.independent.co.uk/travel/news-and-advice/air-passenger-duty-increase-short-haul-flights-april-2025-b2144468.html [9] Sky News (2023). Carer's Allowance to rise to £70 a week under Rachel Reeves plan. [Online] Available at: https://news.sky.com/story/carers-allowance-to-rise-to-70-a-week-under-rachel-reeves-plan-12730486 [10] The Mirror (2023). State pension rise: Millions of pensioners to get £470 boost next year. [Online] Available at: https://www.mirror.co.uk/money/money-news/state-pension-rise-millions-pensioners-26860446 [11] The i (2023). Budget 2024: What is the NHS getting in the UK budget? [Online] Available at: https://inews.co.uk/news/politics/budget-2024-nhs-health-service-funding-uk-budget-2024-announcements-nhs-spending-1215383 [12] The Express (2023). National Living Wage to rise by 6.7% in 2024, Chancellor Rachel Reeves confirms. [Online] Available at: https://www.express.co.uk/finance/personalfinance/1685196/National-Living-Wage-rise-2024-Rachel-Reeves-Chancellor-confirms [13] The Financial Times (2023). Rachel Reeves’s working person definition faces criticism. [Online] Available at: https://www.ft.com/content/5051132e-88a7-46e0-8a6a-e8928617e08a [14] The Daily Mirror (2023). Budget 2024: What time will the Budget speech start? [Online] Available at: https://www.mirror.co.uk/money/money-news/budget-2024-time-budget-speech-26859495

1. The UK government plans to invest £5bn in housing plans next year, a promise made in the forthcoming Autumn Budget 2024.
2. Meanwhile in personal-finance matters, rumours suggest that the National Insurance contribution rate for employers may increase by 1.2 percentage points.
3. In the budget industry, interest rates may change as capital gains tax on assets other than residential property will reportedly rise from 10% to 18%.
4. Additionally, the government has pledged to build 1.5 million homes over the course of this parliament, a promise made by Labour.
5. Technology and education-and-self-development sectors might be affected, as inherited pensions will be brought into the inheritance tax net from April 2027.
6. For lifestyle and business, homebuyers are keeping a keen eye on the Budget for an update on stamp duty thresholds, while motorists can expect a tax cut as fuel duty will be frozen next year.
7. Sports enthusiasts may be impacted, as air passenger duty on flights will also be increased, with a £2 hike for an economy-class short haul flight. On the other hand, private jet users can expect a 50% hike!

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