Autumn Statement – November 2023

National Insurance Contribution Reduction

From 6 January 2024, National Insurance contributions will reduce by 2% for employees earning between £12,570 and £50,268 (from 12% to 10%). Although this will result in less NI being paid each year – £450 per annum based on a £35,000 salary, according to the Chancellor – it will not offset the freeze in income tax and national insurance thresholds, which determine when you start paying each tax.

Self-employed contributions will also be reduced. Class 2 flat-rate weekly contributions of £3.45 a week will be abolished, currently paid if earnings for the year are above £12,570, and class 4 contributions on all earnings between £12,570 and £50,270 will be reduced from 9% to 8%.

Minimum Wage Increases

Minimum wages are set to rise in April 2024.

  • Anyone over 23 on the National Living Wage (NLW) will see a rise from £10.42/hr to £11.44/hr.
  • 21 and 22 year olds will be eligible for NLW for the first time, seeing their current rate of £10.18/hr increase to £11.44/hr.
  • 18 to 20 year olds will see an increase in their National Minimum Wage (NMW), from £7.49/hr to £8.60/hr.
  • Those under 18 will see a rise in their NMW, from £5.28/hr to £6.40/hr.
  • Finally, apprentice rates will also increase, from £5.28/hr to £6.40/hr (for people aged under 19, or those over 19 in their first year of an apprenticeship).

Benefits Increase

A range of benefits will increase by 6.7% in April 2024, resulting in an average household increase of £470 per year, according to the Chancellor.

However, ministers also outlined a plan in development designed to encourage people to take jobs, which would affect the welfare payments for some.

Local Housing Allowance (LHA) Uprate

LHA has been frozen since 2020, but from April 2024 private renters claiming Housing Benefit or the housing element of Universal Credit will get more help with their housing costs, as the LHA will be uprated to reflect current rental prices.

State Pension Increase

In April 2024, the State Pension will increase by 8.5%.  This will equate to £221.20 a week for the full, new flat-rate state pension (for those who reached state pension age after April 2016).

 

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