Autumn Statement 2022: What Jeremy Hunt’s budget means for your pocket - huge change to Universal Credit

The government has confirmed it will increase both benefits and state pensions in accordance to inflation (10.1%) from April 2023.

The Chancellor of the Exchequer has delivered his Autumn Statement in the House of Commons. Jeremy Hunt took his place at the despatch box shortly after 11.30am and said his budget would lead to a “shallower downturn” in the UK’s finances.

Mr. Hunt told MPs that independent economic forecaster, the Office of Budgetary Responsibility (OBR) had confirmed the United Kingdom was “now in recession”. Mr. Hunt also explained that the OBR forecasts the UK’s inflation rate to be 9.1% this year and 7.4% next year and that his autumn statement will cause inflation to “fall sharply from the middle of next year”.

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Mr. Hunt said his priority was: “stability, growth and public services”. Mr. Hunt revealed that the top tax band threshold that dictates the amount of tax you pay based on your earnings has been lowered from £150,000 to £125,510 while the windfall tax levy will increase from 25% to 35% for oil and gas firms. The Conservative party will also extend the freeze on tax thresholds from 2026 to 2028 meaning real world tax increases with wages but the thresholds remain the same - known as a stealth tax increase.

On top of this, dividend allowance has been reduced from £2,000 to £1,000 and then £500 in 2024. The government will also increase NHS spending by £3.3bn each year.

Here’s what the Autumn Statement means for your pocket:

- Benefits and state pensions to rise in accordance with inflation (10.1%) from April 2023.

- 600,000 people in receipt of Universal Credit must meet with work coaches to increase the number of hours they work.

- Increase (9.7%) in National Living Wage to £10.42 per hour from April 2023.

- Energy price guarantee to increase from £2,500 to £3,000 for 12 months from April 2023.

- Additional cost of living payments for the most vulnerable: £900 for people on benefits; £300 for pensioners and £150 for anyone in receipt of a disability benefit.

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- Top rate of income tax is paid lowered from £150,000 to £125,140.

- Electric vehicles no longer exempt from Vehicle Excise Duty from April 2025.

- Windfall tax on oil and gas companies to be increased from 25 per cent to 35 per cent as well as an imposed 45 per cent levy on electricity generators.

- Defence spending to remain at a least of two per cent of GDP.

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- NHS to receive £3.3b more each year for the next two years.

- Devolved administrations will receive £3.4 billion over the next two years. £1.5bn for Scotland, £1.2bn for Wales and £650m for Northern Ireland.

- Add £6b in investment in energy efficiency from 2025 to meet new target of reducing energry consumption from homes and buildings by 15 per cent by 2030.

- Additional cost of living payments for the most vulnerable: £900 for people on benefits; £300 for pensioners and £150 for anyone in receipt of a disability benefit.