What does the autumn budget mean for you?
Written by
Wednesday 30th October 2024
So the autumn budget 2024 has been delivered, with dozens of new measures set to be put in place to stabilise finances and rebuild public services. But what impact might the budget have on the average Brit?
Here are the key points you need to know.
The National Living Wage will rise
Employees currently on the National Living Wage will benefit from more in their pay packet from April 2025 as a result of the autumn budget:
- For employees aged 21 and over, the National Living Wage will rise 6.7% from £11.44 an hour to £12.21
- For those aged 18, 19 or 20, the National Minimum Wage will go up from £8.60 an hour, to £10
- The apprentice rate will increase from £6.40 an hour to £7.55. This applies to eligible people under 19, or those over 19 in the first year of an apprenticeship
Transport costs could change
It’s bad news for those who travel by bus, as the single bus fare cap applied to many routes in England will be raised to £3 in 2025, up from £2. That said, due to different funding systems, single bus fares in London with Transport for London will remain at £1.75 and those in Greater Manchester at £2.
Motorists will be pleased to know that, despite the rumours, fuel duty will remain frozen for the next two years while the existing 5p-a-litre fuel duty cut will be maintained for another year too.
Personal tax thresholds will be uprated in line with inflation in 2028/29
Employees will be pleased to know that the rates of income tax and National Insurance paid by employees have not changed as a result of the budget.
The previous government announced a freeze in income tax and national insurance thresholds until 2028/29. However, beyond 2028/29, personal tax thresholds will be unfrozen to bring them back in line with inflation.
While this won’t have any immediate impact on your finances, it’s good news to look forward to in the coming years as it will prevent more people from being placed into higher tax bands as wages rise in the future.
Inheritance tax changes
Inheritance tax (IHT), which is currently 40%, is usually paid on the value of a deceased person's assets above a threshold of £325,000. This doesn’t currently include any pensions savings that have not been spend before someone dies. However, from April 2027, inherited pensions will be counted which could increase the amount of IHT families will pay in the future.
Until now, owners of certain types of property (such as farms or family business assets) have been able to reduce some or all of their inheritance tax due to various exemptions. Some of these exemptions will be changed from April 2026, as the rules will ensure some tax will be paid on assets of more than £1 million.
You might pay more tax if you already own or are thinking about buying a second home
Second-time buyers will bear the brunt of the tax rises, to provide support for first-time buyers and those moving home. From 31st October 2024, second-time buyers will pay 5% stamp duty land surcharge for second homes as opposed to the current 3%.
Capital gains tax will also go up, though it’s worth noting that the rate on residential properties will not change:
- 10% to 18% for basic rate taxpayers
- 20% to 24% for those who pay at the higher rate.
- For those with gains above the threshold, the levy is 24% from selling additional property, or 20% on profits from assets such as shares
20% VAT will be added to private school fees
If your child or children go to an independent school, you may be hit by an increase in school fees as a result of VAT being added to school fees as of 1st January 2025. However, this will depend on the decision of individual schools, as some may choose to absorb some of the costs.
And after all that… you’ll get a penny off a pint in the pub
The duty on draft alcoholic drinks will be cut by 1.7%, the equivalent of 1 penny off the cost of a pint of beer. We’ll cheers to that!
Written by
Sophie Venner is a Yorkshire-based content writer specialising in crafting content for the financial services industry. She’s written over 300 articles on finance, but she’s covered everything from insurance to digital marketing trends. Her content has been featured in the likes of Semrush, Digital Marketing Magazine and Insurance Business.
