Yesterday the chancellor, Jeremy Hunt delivered his Autumn Statement which he said would ‘reward work and people’. The statement included updates to the National Living Wage, employee national insurance contributions, pensions and benefits, apprenticeships and the Government’s Back to Work Plan. We have summarized these updates below.
The biggest increase to the national living wage in more than a decade was announced to offer support through the cost of living crisis. From 1st April 2024, the National Living Wage is set to increase to £11.44 per hour from the current £10.42 per hour. This is expected to benefit over 2.7 million low-paid workers.
One key change that employers need to be aware of is that for the first time ever, workers aged 21 and 22 will also be entitled to the National Living Wage from April 2024. Currently, it is only those aged 23 and over.
These changes see an increase of 9.8% for over 23s and an increase of 12.4% for those aged 21 and 22 compared to the current rates.
Please see the tables below for the current and new rates from April 2024.
April 2023 (current rate)
|23 and over
|21 to 22
|18 – 20
|21 and over
|18 – 20
Apprentices are entitled to the apprentice rate if they are:
The government plans to implement £50 million in funding over the next two years to help boost the level of apprenticeships in the UK. This funding will be for engineering and ‘other key growth areas’.
In the second biggest rise ever, the state pension will increase by 8.5% in April 2024 to £221.20 a week.
The Autumn Statement revealed the government will consult on a ‘‘pot for life’’ pension reform that will provide people with more flexibility around their pensions. This will give workers a ‘‘legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, meaning people can choose to have one pension pot for life’’.
The current national insurance rate is charged at 12% on earnings between £12,571 and £50,271 and 2% on anything above this. The main rate will be cut from 12% to 10%. It is important to note that this change will come into effect from 6th January 2024, rather than in the new tax year in April 2024. This cut will increase 27 million people’s take-home pay.
Universal credit will be increased by 6.7%, providing an extra £470 a year for those who claim.
The Chancellor announced that the Government’s Back to Work Plan will focus on supporting those with long-term sickness and disabilities back into work. This plan would include:
He has also announced that the government will provide an additional £1.3 billion of funding to help the 300,000 people in the UK who have been unemployed for over a year without any sickness or disability. If after 18 months of support, jobseekers have not found employment, the government will roll out a programme requiring them to take part in mandatory work placements. If jobseekers do not participate in this scheme for six months, their benefits will end. Critics suggest that this may impact negatively on vulnerable people and should be approached with caution.
To find out more information or if you require any advice surrounding the Autumn Statement get in contact with our team of experts.
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