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Autumn Budget: what it could mean for you

5 key takeaways from the Autumn Budget and Spending Review

As we hear that the economy is expected to return to pre-pandemic levels at the beginning of next year, the chancellor delivers his spending and taxation plans in his Autumn Budget. Let's look at some key takeaways.

  1. 01

    The Office for Budget Responsibility (OBR) predict the economy willl recover quicker than was expected, with a growth forecast of 6.5% for this year and 6% for 2022. The OBR also downgraded the economic impact of COVID from 3% to 2%, and its unemployment forecast from 12% to 5.2%. 

  2. 02

    The OBR have forecast that inflation could hit an average of 4%. This led to the chancellor announcing a a range of measures aimed at managing the cost of living including an increase in the minimum wage, a reduction in the Universal Credit taper, continuation of the fuel duty freeze and an overhaul of alcohol duties.

  3. 03

    The chancellor pledged an increase in the "block grant" for devolved administrations, as well as allocating the first round of bids from the levelling-up fund and billions of pounds of spending on transport infrastructure, bus services and road upgrades, particularly outside of London. 

  4. 04

    In a bid to support sectors hit particularly badly by the pandemic, the chancellor announced a 50% business rates discount for retail, hospitality and leisure sectors, as well as a cut in Air Passenger Duty on domestic flights.

  5. 05

    The spending review was relatively light on climate change. In fact, many campaigners accused the government of being anti-green as a result of announcements made regarding a continued fuel duty freeze and reduction to domestic flight Air Passenger Duty.

Raising a glass, but not duty

Key budget announcements

Pay & benefits

National living wage

From April 2022, the national living wage will rise by 6.6% to £9.50 an hour for those aged 23 and over. The rise means a full-time worker will get £1,074 extra a year before tax. By 2024, the chancellor has committed to raising this again to £10.50 per hour.

Universal Credit taper

The introduction of a lower taper rate for those on Universal Credit was announced by the chancellor. This means the proportion of each pound kept by those in work and in receipt of Universal Credit will increase.

Work allowance

Rishi Sunak announced an increase of £500 to the work allowance. This is the amount you can earn before your Universal Credit payment is affected.

Transport

Fuel duty

A cancellation of a fuel duty rise for the twelfth year in a row was announced by the chancellor. This comes as we continue to see record high natural gas prices, and subsequent price rises at the forecourt. Climate campaigners may see this as a contradictory announcement, especially given the UK is hosting the upcoming climate conference, COP26, in Glasgow.

Air passenger duty

Whilst a new ultra long haul band in Air Passenger Duty for flights of over 5,500 miles will be introduced from April 2023, APD will be reduced for internal flights from April 2023.

Roads and railways

Investment of £21bn announced on roads and £46bn on railways to improve journey times between cities. An investment of £360m in modernising ticketing and retail systems and £205m to begin mobilisation of Great British Railways was also announced.

Education & skills

Adult education

According to the chancellor, there are millions of adults whose numeracy skills are lower than those expected from a nine-year-old. To help address this, government will launch a UK-wide numeracy service called Multiply. The programme will help 500,000 adults improve their numeracy.

Funding for schools

Schools are to get an extra £4.7bn by 2024-25. Schools funding is set to return to 2010 levels in real terms - an equivalent per pupil cash increase of more than £1,500.

Start for life

£300m will be spent on a "Start for Life" parenting programmes, including around £80m to create another 75 family hubs across England. An additional £170m by 2024-25 has been promised for childcare.

Business

Business rate discount

The chancellor announces a 50% business rates discount for companies in retail, hospitality and leisure sectors, up to a maximum of £110,000.

Business rate multiplier

Next year’s planned increase in the business rates multiplier will be cancelled. That is worth £4.6bn over the next five years, according to the chancellor.

Business rate exemptions

Business rates relief for "green" property improvements were announced as part of the spending review. Eligible improvements include the likes of solar panels, while it is expected heat pumps and increased office ventilation will also full under the exemption.

Housing

New, affordable housing

The chancellor has commitment to invest £11.5bn in new, affordable housing and "unlock a million new homes.” This includes £1.8billion to be invested in the development of 1,500 hectares of brownfield land.

Property developer levy

A 4% levy will be placed on property developers with profits over £25m. This will help create a £5bn fund to remove unsafe cladding from buildings.

Tackling homelessness

The government has announced they will be spending £640m a year to address rough sleeping and homelessness. According to the chancellor, this is an 85% increase in funding compared with 2019.

National living wage to rise to £9.50 per hour

How will the living wage increase affect me?

Check out the table below to find out how much more you will be paid from April 2022. We've outlined the change per hour and over the course of a year.
Remember, these changes are calculated before tax. It's important to calculate your take home pay after tax and other deductions. Check out our guide to take home pay to find out how this may affect your monthly wage.

NatWest blog team

Updated 28th October 2021