The Chancellor of the Exchequer announced today that the state pension, benefits and tax credits will rise in line with inflation – 10.1% The state pension will be £10,600 a year. This eagerly anticipated rise in payments has been welcomed by the senior citizens of Lytham St.Anne’s and those claiming benefits and tax credits. The increase in social rents to be capped at a maximum of 7% in 2023/24.
However, it is not good news for some as Jeremy Hunt also announced a freeze on income tax thresholds, meaning millions of people will pay more in tax as their wages rise. This freeze on the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds for a further two tax years – to April 2025. Labour says this is the equivalent of “pickpocketing” the public and making working people pay.
Other main points include:
- The decade-long cap on council tax increases is being lifted so town halls can impose 5 per cent without holding a referendum. At the moment, councils cannot make increases of more than 3 per cent, including a one per cent precept to pay for social care, without holding a local poll.
- Help with energy bills will be cut back, with typical bills rising from £2,500 a year to £3,000 from April But extra payments are coming: £900 for those on means-tested benefits, £300 for pensioner households and £150 for those on disability benefits
- The National Living Wage to rise by 9.7% from April to an hourly rate of £10.42 for the over 23s, an annual pay rise worth over £1600 to a full time worker.
- The point at which the highest earners start paying the top rate of tax will be lowered from £150,000 to £125,140
- The windfall tax on major oil and gas producers is raised to 35% from 25%. A 45% energy profits levy rate to be imposed on electricity generators will raise a combined £14bn next year.
- Electric vehicles will no longer be exempt from vehicle excise duty from April 2025
- The Government will proceed with the Sizewell C new nuclear plant with £700m investment by taxpayers to bolster energy security and diversify further from harmful carbon.
- New funding, from 2025, of a further £6bn in energy efficiency.
- Adult social care will have additional grant funding of £1bn next year and £1.7bn the year after. This means an increase in funding available for the social care sector of up to £2.8bn and £4.7bn respectively.
- The NHS budget will increase in each of the next two years by an extra £3.3bn.
- An extra £2.3bn per year will be invested in our schools.
- There will an extra £1.5bn for the Scottish government, £1.2bn for the Welsh government and £650m for the Northern Ireland Executive.