Five things you need to know about the Autumn Budget 2021
Today was the Autumn Budget. The key takeaway was that there are "challenging" months ahead. For many of us, this is not new news – thanks to the pandemic, many of us are finding that our household budget just doesn’t seem to stretch as far as it used to. But what does the government’s announcement mean for you – is there hope on the horizon?
We look at five of the key changes revealed today.
1. National Living Wage
The National Living Wage will rise to £9.50 an hour, up from its current level of £8.91 – an increase of 6.6%; a rise of £1,000 a year for a full-time worker.
The government said this will benefit more than two million people.
There are different levels of National Minimum Wage (NMW), depending on your age and whether you are an apprentice.
If you're aged 23 and over, you'll get the National Living Wage (NLW).
The hourly rates change every April.
Universal Credit changes are said to save nearly 2 million families an average of £1,000 a year
2. Universal credit
The Universal Credit Taper rate - which cuts state support as people work more hours - will be reduced from 63p to 55p – a boost for low-income households.
The taper rate is the amount of Universal Credit payments people lose as they earn more above a certain amount, known as the work allowance. A lower taper lets people keep more of the money they earn before their benefits are withdrawn.
This means for every £1 you earn, your Universal Credit payments will soon be reduced by 55p per £1 rather than 63p per £1 - an 8p per pound saving.
What’s more, work allowances for households with children or a limited capacity for work will rise by £500 a year, also by 1 December. This means these households will be able to earn more before their Universal Credit payments are hit by the taper rate.
According to official predictions, these two changes will benefit nearly two million families who will keep, on average, an extra £1,000 a year.
It’s said that a single parent of two, renting, and working full-time on the National Living Wage will be better off by around £1,200, while a couple who is renting a home with their two children - one working full-time, the other working part-time - will be better off, every single year, by £1,800.
3. Air Passenger Duty
The rate of air passenger duty will be lowered on domestic flights from April 2023. According to the speech, this means nine million passengers will see their duty cut by half.
The current rate of APD on these flights is £13. However, there will be a new ultra-long haul in air passenger duty, covering flights of over 5,500 miles.
The new APD band will cost £91 in tax for seats in Economy, on flights of over 5,500 miles - a £7 increase from the current rate.
There’s good news for drivers today as another freeze to fuel duty has been announced after petrol prices hit a record high this week.
Compared to pre-2010 plans, today’s freeze means the average tank of fuel will cost around £15 less per car, £30 less for vans and £130 less for HGVs.
Just in time for the upcoming holiday season, a planned increase in alcohol duty on spirits such as Scotch whisky, wine, cider and beer will be cancelled from midnight.
What’s more, a “radical” simplification of alcohol duty has been announced.
The concept is simple - the stronger the drink, the higher the rate.
So, the 28% duty premium on sparkling wines and duty on fruit ciders will be cut while the draught relief will apply a lower rate of duty on draught beer and cider, cutting the tax by 5% on drinks served from draught containers over 40 litres and bringing the price of a pint down by 3p.
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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.