On 30th October 2024, the government announced their Autumn Budget. This was the first from the new Labour government and the first ever budget delivered by a woman. The big questions that everyone are asking are what does the budget mean for them? With this in mind, let’s take a look at what the 2024 budget means for you in a variety of different areas.
Pensions
The State Pension Triple Lock is here to stay. Therefore, next year both new State and Basic pensions will increase by 4.1%.
This means weekly payments of £176.45 on a basic State Pension and £230.25 on the new flat-rate State Pension from April 2025. For anyone who has an income that is less than the Minimum Income Guarantee (MIG) it may be possible to get Pension Credits to top this up.
Benefits
For those who are receiving benefits such as UC, PIP and ESA then no changes have been announced in this budget. However, it should not be ruled out that this might happen in 2025. For those under State Pension age in receipt of benefits these will be going up in April 2025 by 1.7%.
· Carer’s allowance – The weekly earnings limit is increasing by around £30 a week.
· Third party reductions – This is the percentage of UC that a company you owe money can apply to be paid from the money that you get. It is currently up to 25% of UC. However, from April 2025 this will change. The budget has announced that this amount will change to 15%.
· AET threshold – For those who receive UC and are in a work-related activity group the threshold will be increasing in April 2025. This may push people over or under the threshold. They may need to start looking for more work.
· Minimum income floor for self-employed – Self employed people claiming UC may be affected by the increase in the National Minimum Wage. Regular confirmation of circumstances will need to be reported. Not doing so could mean UC will be cancelled.
· Child Benefit Rules – Although changes to child benefits had been expected, there were no changes in this budget.
Work
The National Minimum Wage:
- It will increase for everyone
- The increase will be from £11.44 to £12.21 per hour for those aged 21 or over
- For those aged 18-20 the increase will be from £8.60 to £10 per hour
- Apprentices or those aged 16-17 will see an increase from £6.40 to £7.55 per hour
Income Tax and National Insurance
Both income tax and NI will stay the same. However from April 2025 employers will pay more for NI, this will increase from 13.8% to 15% for any employees earning over £5000 per annum. Because this will impact small businesses, the amount of Employment Allowance they can claim will increase. This will go up from £5,000 to £10,500
Cost of living
A number of changes affecting cost of living were announced:
· Bus fare cap will increase from £2 to £3 for a single bus journey
· Fuel duty will remain the same until April 2026
· Household Support fund will continue until 2026
If you’re concerned about your finances, don’t hesitate to seek help. By knowing your figures, you’ll be able to know how the 2024 budget affects you. That way, you can plan for the future with confidence.
