The Labour Government has unveiled its 2024 Autumn Budget, outlining key financial policies and proposals aimed at addressing the current economic challenges faced by the UK. This Budget is particularly significant as it marks the first budget under the new administration, setting the tone for Labour’s priorities and vision for the nation’s future.
So, what does this mean for you? As we unpack the key highlights of the Budget, we’ll explore how these changes could impact your personal finances. With that in mind, here are the top 5 things we think you need to know about the budget:
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National Minimum Wage Increase
- Announcement: The National Living Wage for employees aged 21 and over will rise by 6.7% to £12.21 an hour from April, with the 18-20 age group rate increasing by 16.3% to £10.00 per hour, and the 16-17 age group and apprentice rates both going up by 18% to £7.55 per hour.
- What this means for you: If you’re on minimum wage, expect a pay boost from next April. Be sure to check your pay slips to see how this impacts your take-home pay. For a full-time worker, this could mean up to an additional £1,400 annually – whether you choose to spend or save, it’s a good idea to plan your budget wisely.
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Carer’s Allowance Earnings Limit Increased
- Announcement: The earnings limit for Carer’s Allowance will rise, allowing carers to earn up to £10,000 while still receiving the allowance.
- What this means for you: If you’re a carer, this increase offers you more flexibility to earn additional income without losing your entitlement to vital financial support, helping you manage rising costs while continuing to care for loved ones.
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Universal Credit Debt Repayment Limit Lowered
- Announcement: A cap on debt repayments deducted from Universal Credit has been lowered, benefiting 1.2 million low-income households.
- What this means for you: For those on Universal Credit, this means less of your payments will be automatically deducted to repay debts, leaving you with more money to cover essentials each month, easing the financial pressure many households are facing.
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Travel Costs Update
- Announcement: The single bus fare cap for many routes in England will remain but increase to £3 in 2025, up from £2. Fuel duty will remain frozen, with an extension of the 5p-a-litre cut.
- What this means for you: For public transport users, the rise in bus fares may affect your daily travel costs. However, the continued freeze on fuel duty, along with the extended cut, offers some relief for drivers as tax on petrol won’t go up. It’s essential to factor travel costs in when planning monthly expenses.
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Impact on Homeowners and Property Investors
- Announcement: The stamp duty surcharge on additional homes will increase by 2%, bringing it to 5%. Additionally, Capital Gains Tax (CGT) for non-residential assets will rise from 10% to 18% at the lower rate and from 20% to 24% at the higher rate. However, there will be no change to CGT for residential properties, which remain at 18% and 24%.
- What this means for you: If you own or are buying a second property, like a buy-to-let or holiday home, you’ll face higher stamp duty costs. Investors in commercial property will also need to plan for the rise in Capital Gains Tax. However, if you’re selling or holding residential properties, the tax rates stay the same, but you’ll still need to account for them when making decisions.
Leon Ward, MyBnk CEO, said:
“At MyBnk, we acknowledge the Government’s 2024 Autumn Budget as an important development in the ongoing conversation around financial empowerment. The focus on raising the minimum wage and investing in education aligns with our aim for a more equitable society. However, we believe there is still much work to be done. We are disappointed that financial literacy and its importance to financial inclusion were not prioritised more prominently. Given the UK’s financial literacy rates, many people may not fully understand the implications of these policies, underscoring the vital role financial education plays in helping individuals navigate the economic decisions that affect their lives. To truly empower citizens and support economic growth, comprehensive financial literacy initiatives must be at the heart of government policy. This is critical to ensure people manage, plan and best utilise their own personal money. As we’ve seen with the under-utilisation of pension credits and the 500,000 unclaimed child trust funds, financial literacy has a real, tangible impact on people’s lives. Our goal is to ensure that everyone understands the financial changes announced today and is equipped to plan and respond effectively.”
As more details emerge about the 2024 Autumn Budget, we will continue to analyse the implications of these announcements and how they align with our vision of creating a financially fluent population. We believe that financial literacy should be considered a right for all, and we are actively working to advocate for financial education at all levels of government, for both young people and adults, in recognition of its critical role in empowering individuals and fostering economic resilience.
If you work with children and young people and want to help them improve their financial literacy, click here to find out how to book a MyBnk session.
