The Autumn Statement 2016 has now been announced, bringing some changes that could affect your personal finances.
It was announced that a new three-year National Savings & Investment bond is to be made available from spring 2017 with an indicative rate of 2.2%. This will allow anyone aged 16 or over to put away between £100 and £3,000. We are happy to say that we’ve paid a bonus of 3% on our Stocks and Shares ISA for the last 9 years.
Find out more about our savings plans here
It is always handy to know what’s included in the Autumn Statement so that you can prepare for the changes when they arrive.
Below we have listed some of the main points that the Chancellor announced.
Public borrowing/deficit/spending
- Borrowing is forecast to be £122bn higher in the period until 2021 than forecast in March’s Budget
- Debt will rise from 84.2% of GDP last year to 87.3% this year, peaking at 90.2% in 2017-18
- Office for Budget Responsibility (OBR) forecasts borrowing of £68.2bn this year, then £59bn in 2017-18, £46.5bn in 2018-19, £21.9bn in 2019-20 and £20.7bn in 2020-21
- Public spending this year to be 40% of GDP – down from 45% in 2010
- Departmental spending plans set out in the 2015 Spending Review to remain in place
- The government will meet commitments to protect budgets for key public services, defence, overseas aid and the pension “triple lock” until the end of this Parliament
The state of the economy
- The chancellor promises “fiscal headroom” to support the economy through Brexit
- Forecast growth of 1.7% in 2018, 2.1% in 2019 and 2020 and 2% in 2021.
- The government is no longer seeking a budget surplus in 2019-20, and is committed to returning public finances to balance “as soon as practicable”
Taxation/pay
- Income tax threshold to be raised to £11,500 in April, from £11,000 now
- Higher rate income tax threshold to rise to £50,000 by the end of the Parliament
- Tax savings on salary sacrifice and benefits in kind to be stopped, with exceptions for ultra-low emission cars, pensions, childcare and cycling
- National Living Wage to rise from £7.20 an hour to £7.50 from April next year
- Employee and employer National Insurance thresholds to be equalised at £157 per week from April 2017
- Insurance premium tax to rise from 10% to 12% next June
Housing
- Ban on upfront fees charged by letting agents in England “as soon as possible”
- £2.3bn housing infrastructure fund announced, to help provide 100,000 new homes in high-demand areas
- £1.4bn made available to deliver 40,000 extra affordable homes
Fuel
- Fuel duty rise cancelled for seventh year in succession – at a cost of £850m, saving the average car driver £130 and the average van driver £350 a year
- For the oil and gas sector, the Carbon Price Support will be capped until 2020 and business rate reductions worth £6.7bn will be implemented
Transport
- £1.1bn extra investment in English local transport networks
- £220m to reduce traffic pinch points
- £23bn to be spent on innovation and infrastructure over five years
- £2bn per year by 2020 for research and development funding
- £1.8bn from Local Growth Fund to English regions
- Rural Rate Relief to be increased to 100%, “giving small businesses a tax break worth up to £2,900”
Business
- Doubling UK export funding capacity
- £400m into venture capital funds through the British Business Bank to unlock £1bn in finance for growing firms
