In an address to the House of Commons, Chancellor Jeremy Hunt has laid out the details of his Autumn Statement, which outlines the UK government’s spending and taxation plans for the upcoming year. The statement includes a number of measures that will impact the take-home pay and household budgets of millions of UK residents, as well as indicating the amount of public spending that will be focused on key services.
The Autumn Statement features several key changes to taxation and wages. Among these are a reduction in the main rate of National Insurance from 12% to 10% starting in January 2022 and affecting 27 million people, the abolition of Class 2 National Insurance, which is paid by self-employed people earning more than £12,570, and a cut in Class 4 National Insurance for self-employed people earning between £12,570 and £50,270 from 9% to 8%, to take effect from April. The National Living Wage will also increase from £10.42 to £11.44 per hour in April 2022, and a new rate will apply to 21 and 22-year-old workers for the first time.
The statement also includes changes affecting benefits and pensions, including a 6.7% increase in Universal Credit and other working-age benefits from April 2022 in line with September’s inflation rate; an increase to 30% of local rents for Local Housing Allowance rates which determine the housing benefit and Universal Credit people receive to pay rent; and measures to help people with health conditions and the long-term unemployed find work. Claimants who refuse to seek employment will lose access to their benefits and extras, including free prescriptions. The state pension payment will increase by 8.5% from April 2022 in line with average earnings.
The report also highlights the government’s projections for the UK economy and public finances, including the Office for Budget Responsibility’s forecast that the economy will grow by 0.6% in 2021, 0.7% in 2022, and 1.4% in 2025, with underlying debt set to fall to 91.6% of GDP next year. The statement also includes measures to support business and infrastructure, including allowing companies to deduct spending on new machinery and equipment from profits, with a £4.5bn investment to attract funding to key manufacturing sectors.
Other measures in the Autumn Statement include funding to tackle anti-Semitism in schools and universities, and £5m to establish a center at Imperial College to work on innovations in health care
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