HOMEOWNERS and benefit recipients are getting extra support under a few changes hidden in Autumn Statement documents.
Chancellor Jeremy Hunt today set out a raft of government policies that will hit Brits with the highest tax burden since WWII.
Pensioners are also getting a state pension boost worth £870 a year thanks to the triple lock staying.
Meanwhile, millions of taxpayers will be thousands of pounds worse off over the coming years due to freezes on income tax and more.
Below we round up key announcements not mentioned by Mr Hunt, but that can be found in the official documents.
It comes as Mr Hunt announced:
- Up to £1,350 in cost of living payments
- Pension triple lock to stay in £870 boost for seniors
- Benefits including Universal Credit and pension credit to rise with inflation
- New work coach requirements for Universal Credit
- Social housing rents to rise 7%
- Freeze on income tax and National Insurance thresholds
- Stamp duty cut to end in 2025
- Typical energy bills to be capped at £3,000
- Minimum wage to rise to £10.42 an hour
1. Mortgage support for benefit claimants
The scheme is available to homeowners on certain income-related benefits.
From spring 2023, the government will allow those on Universal Credit to apply for a loan to help with interest repayments after three months, instead of nine.
It’s important to note that SMI is a loan, which you’ll need to repay with interest when you sell or transfer ownership of your home.
In other words, don’t take it out if you don’t actually need it.
There’s also no guarantee that you’ll get SMI for a mortgage or loan you take out.
SMI will only help you pay the interest on your mortgage, not the amount you borrowed.
If you qualify for SMI, you’ll usually get help paying the interest on up to £200,000 of your loan or mortgage.
Secondly, the government will also scrap the zero earnings rule to allow claimants to continue receiving support while in work and on UC.
Previously, UC claimants have been barred from getting help if they or their partner have any earned income.
Mortgage rates have finally started falling after soaring to a 14-year-high last month.
2. Benefits cap
Similar to benefits rising in line with the September inflation rate, the benefit cap will increase by 10.1% from April 2023 too.
The cap will be raised from £20,000 to £22,020 for families nationally and from £23,000 to £25,323 in Greater London.
While for single adults it will be raised from £13,400 to £14,753 nationally and from £15,410 to £16,967 in Greater London.
The cap is a limit on the total amount of benefit you can get.
It applies to most people aged 16 or over who have not reached state pension age.
The benefit cap affects:
- Universal Credit
- Bereavement Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance
- Housing Benefit
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widow’s Pension if you started getting it before 9 April 2001)
3. Minimum wage pension boost
The national living wage and national minimum wage will rise from April 2023, giving millions of workers a pay boost.
While that wasn’t hidden in the documents, it’ll bring with it a lesser-known pension benefit.
The rates are going up as follows:
- Workers aged 23 and older: from £9.50 an hour to £10.18
- Workers aged 21-22: from £9.18 an hour to £10.18
- Workers aged 18-20: from £6.83 an hour to £7.49
- Workers aged under 18 and apprentices: from £4.81 an hour to £5.28
Kate Smith, head of pensions at Aegon, said: “Not only will this provide a boost for lower earners struggling to meet the demands of the rising cost of living, but what people might not realise is the hidden pension benefit under auto-enrolment.”
Over the course of the year, this means an extra £134 going into pensions for workers aged at least 23, according to Aegon.
This assumes the workers haven’t opted out of automatic enrollment, which helps you save for your golden years.
Once you earn over £10,000 you start paying into a pension automatically.
You pay the minimum contribution of 5% of your earnings, though you can put in more.
You also get cash from your employer of 3%, though some employers put in more.
Currently, eligible employees working full-time on the national living wage will have a total pension contribution of £884 a year, but this will increase to £1,018 thanks to the pay rise.
While this may not seem like a lot, just a small increase can still be beneficial to future savings thanks to compound investment growth.
4. Alcohol duties to rise
Drinkers are facing the biggest tax hike since the English Civil War as spirits duties are set to rise.
Today’s Autumn Statement documents confirmed that tax on spirits like gin and whisky will go up by 12.6% RPI next Spring.
This will be the biggest rise since the duty was first brought in 1643.
The increase was first introduced by then-Chancellor Rishi Sunak last year, with today’s statement confirming that it will go ahead.
Retailers are urging Mr Hunt to freeze duties before next April.