Autumn statement 2023

Susannah Streeter appears onscreen to talk about the Autumn Statement

Jeremy Hunt might be able to boast that the UK has narrowly escaped recession given the latest forecast from the office for Budget Responsibility. However, the economy faces deteriorating growth prospects.

The difficulties facing the UK have overshadowed the chancellor’s giveaways. The FTSE 100 staying in negative territory, and the more domestically focussed FTSE 250 not nudging much. The pound has hardly moved, still hovering around $1.25.

News that inflation is now projected to fall to 2.8% by the end of 2024 will provide much needed relief for businesses and consumers sideswiped by high borrowing and soaring input costs. But there’s still an uphill struggle ahead in terms of growth.

The economy will still struggle to bust out of the clutches of stagflation, especially with the UK lagging behind in the global business investment league.

Jeremy Hunt did brandish more tricks from up his sleeve from planning to pensions reform to unlock development and flows into British business. Making full expensing permanent is the move companies were holding out for, and finally they receive the relief they were seeking.

This allows companies to set 100% of their capital expenditure off against tax immediately. It will not only help with company cash flow, but also enable businesses to make commitments stretching far further into the future.

While this change will certainly reassure businesses, investors are still holding their breath for a bolder, bigger plan to super-charge growth.

Sarah Coles appears onscreen to talk about the 2023 Autumn Statement.

A 2% cut to Class 1 National Insurance rates will be introduced from 6 January 2024.

It will apply between the primary threshold and the upper-earnings limit. This will be the third change in less than two years.

For those struggling under a massive tax burden, this will bring real relief. A 2% cut isn’t to be sniffed at and it will make a big difference to the money in people’s pockets.

It will cut £149 off the tax bill of someone earning £20,000 and £754 for anyone earning over the higher rate tax threshold.

The Chancellor will be hoping this is enough to help people, without further fuelling inflation.

Helen Morrissey appears onscreen to talk about the 2023 Autumn Statement.

Today’s Autumn Statement contained a whole raft of pension changes that could potentially have a huge impact on people’s retirement planning.

The chancellor has confirmed state pensions will rise 8.5% in line with the triple lock. This is the second blockbusting increase in a row. There had been concerns government might opt for a lower increase such as average earnings without bonuses, or inflation.

Today’s announcement will be greeted with relief by pensioners who have been struggling with the rising cost of living. With inflation starting to fall back the 8.5% increase could help to put some much-needed space in people’s budgets.

“Another key announcement from today was on Lifetime Pensions,. This is where people can choose to have one pension throughout their working life rather than having a different one with each employer.

Allowing people to choose a pension provider that they contribute to throughout their working lives can have a transformative effect on their retirement planning.

With people moving jobs frequently they will be less likely to lose track of pensions from previous employers and having an overarching view of what they have accumulated can help them make more informed retirement decisions.

There will be a need to ensure Lifetime Pensions deliver value for savers, but fixing the leaks of money is a good first step to creating a pensions system around people, rather than their employers.

The upshot will be a system more centred on the individual, giving them extra choice.

We also got more detail on government plans designed to boost pension scheme investment in the UK’s science and technology businesses.

In addition, government has confirmed its intention to establish a Growth Fund within the British Business Bank.

Alongside work aimed at boosting investment in more productive assets this has the potential for schemes to invest in a wider range of assets. This could boost long-term investment returns for pension savers and the government has made punchy claims for how they can increase retirement incomes.

It is important that final decisions are made based on what is best for members. However, these reforms have the potential to boost people’s pensions as well as helping the UK economy to thrive. Alongside reforms aimed at consolidating schemes this could result in a very different pension landscape in the years to come.”