The Autumn Statement is like a mini-Budget, in which the government announces the changes it will make to things like taxes, benefits, savings and the cost of fuel. Find out what changes have been announced today – and how they will affect your family.
Whenever the government makes changes to the nation’s budget (and starts altering things like tax rates and benefit levels) there are always some winners and some losers.
Will your family win or lose from the Autumn Statement changes?
Will your family win or lose from the changes? Find out below…
The government has scrapped a planned 2p hike in fuel duty. The price rise was due to kick in early next year, but the Chancellor has bowed to pressure from motorists and many of its own MPs and binned this increase.
The government claims that this will mean petrol will cost 20p/litre less.
This should save the typical driver over £90 a year in fuel costs, though the average price of a litre of unleaded petrol still stands at over 130p. See how you can further cut your fuel costs.
Don’t get too excited – train ticket prices are still hideously expensive, AND will still be going up in price in 2014.
The slight good news?
In January 2014 the average regulated rail ticket will now go up by 3.1% instead of the planned 4.1%. (So a 1% reduction in the planned rise).
In theory, this could ‘save’ the average commuter in south east England £40 or £50 a year. But train companies will still be able to increase some fares by over 5%, as long as they cut similar fares elsewhere. So don’t break out the party poppers just yet.
See how to cut the cost of your train tickets.
Low earners (who aren’t on benefits)
The government have confirmed that the tax-free personal allowance (which is the amount of money you can earn before paying any income tax) will remain at £9,440 for the 2013/14 tax year.
For the 2014/15 tax year, the personal allowance will rise to £10,000. That’s worth £112 a year in saved tax for most low earning taxpayers (though higher earners benefit too!)
Because of this and previous income tax threshold increases, George Osborne says that “people working full-time on minimum wage will have seen their income tax bill cut by half.”
However many benefits – such as housing and child benefit – have suffered real-term cuts (discussed below). So if you also receive benefits (in-work or otherwise) you may find yourself worse off over the next few years despite the rise in your tax-free personal allowance.
To make the most of your money, look at our guide on how to budget.
From April 2015, up to £1,000 of the income tax personal allowance will be transferable between adults who are married or in a civil partnership.
The policy will work by allowing an individual not using all of their income tax allowance (because their income is less than the £10,000 allowance) to transfer up to £1,000 of the unused allowance to their partner.
This transferred allowance would lower the spouse’s tax bill by up to £200 a year.
However according to the Institute of Fiscal Studies, just 28% of married couples will benefit from the policy.
Also if you’re a single parent you obviously get no tax breaks as a result of this policy.
Those struggling to afford school meals
The Chancellor announced an expansion of free school meals to all school children up to year two.
Those struggling to afford their energy bills
The government are rolling back ‘green levies’ that are added to energy bills. This means that families should see a reduction of around £50 in their energy bills next year.
However, energy bills are still rising – so your energy bill may still be higher even taking into account the £50 reduction!
Those born from 1960 onwards
The government have announced that the retirement age will reach 68 by the mid-2030s.
This means that if you were born from the mid-1960s onwards, you will see a noticeable increase in the age at which you retire compared to your parents.
If you’re in your 40s today, you likely won’t be entitled to the state pension until you’re 68.
If you’re in your 20s today, you won’t be entitled to the state pension until you hit 70.
Those on benefits
The Chancellor unveiled real-term cuts to many working-age benefits in his Autumn Statement.
Those who receive any of the following will all feel an extra squeeze over the next few years:
- Child Benefit
- Child Tax Credits
- Employment and Support Allowance
- Income Support
- Housing Benefit
Mr Osborne announced a 1% cap on benefit increases from April 2014 until 2016. This means a cut in real-terms, as these benefits almost certainly won’t keep pace with inflation (the Retail Price Index inflation rate – which measures the prices of everyday goods – currently stands at 2.2%). So already, a 1% rise isn’t going to dull the financial pain very much at all.
The exception to the benefit cap
Those on carer benefits and disability benefits will see their payments rise in line with inflation (including the disability elements of tax credits). Jobseeker’s Allowance and pensions are also excluded.
Some working families will be ‘£3,000 a year worse off’
The Trades Union Congress (TUC) has warned that the 1% cap on Tax Credits and Child Benefit will contribute to some working families being £3,000 worse off a year by 2015.
For example, they calculated that a family of two working parents with a combined income of £40,000, two kids and childcare costs of £300 a week will lose around £2,800 a year by 2015/16.
Are you a winner or a loser?
Will your family benefit from the Autumn Statement changes or be worse off? Let us know your thoughts – leave a comment below, tweet us @MyFamilyClub or e-mail us at [email protected].