What the Autumn Statement means for you and your money

Opening his speech by outlining three key priorities: stability, growth, and public services, Chancellor Jeremey Hunt announced a host of tax rises and spending cuts to fill the £50billion fiscal hole caused by the Tories’ earlier mini-budget and stem the country’s soaring inflation rate. Addressing the state pension triple lock, income tax, energy bills, and more, here’s what the Autumn Statement means for finances.Despite taking ‘difficult decisions’, the Chancellor pledges to have provided ‘fair solutions’, arguing the most vulnerable are being protected.This comes amongst a raft of stealth taxes and tax increases to patch up the holes and restore economic stability and credibility with international markets.Tax thresholdsThe Chancellor has made several freezes and changes to a range of tax thresholds, from income to the much-hated inheritance tax.Addressing the House of Commons, Mr Hunt said: ‘I have tried to be fair by following two broad principles: firstly, we ask those with more to contribute more; and secondly, we avoid the tax rises that most damage growth.READ MORE: Jeremy Hunt confirms £900 cost of living payment for benefit claimants ‘Greater tax burden’: What the Autumn Statement means for you and your money (Image: GETTY)’Although my decisions today do lead to a substantial tax increase, we have not raised headline rates of taxation, and tax as a percentage of GDP will increase by just one percent over the next five years.’Income taxFirstly, income tax thresholds have been frozen for a further two years from 2026 to 2028 instead. This move is referred to as a stealth tax.Sarah Coles, senior personal finance analyst at Hargeaves Lansdown commented: ‘Stealth taxes mean that long after the fuss of the Autumn Statement dies down, the taxman will be quietly picking your pocket for years to come.’Income tax bands were already frozen to 2026 and will now be frozen to 2028. We don’t tend to notice stealth taxes, because they only kick in as we get a pay rise.’Ms Coles explained: ‘It means we lose more of our extra pay – so we’re never actually worse off in nominal terms. Of course, once you take inflation into account, it’s another matter entirely, and the taxman taking an extra slice leaves us with an even harder struggle to make ends meet.’DON’T MISS: Horror chart shows taxes at highest level since WW2 [ANALYSIS]Jeremy Hunt gives update on review into increasing state pension age [INSIGHT]’Most expensive’ household appliances ‘raking up’ your energy bills [EXPLAINED] The higher rate income tax threshold has been reduced to £125,140 (Image: EXPRESS) Jeremy Hunt slashes dividend allowance in blow for investors The higher rate tax threshold at which the 45 percent rate kicks in has also been reduced, meaning higher earners will now pay more tax on their earnings.Currently, people pay income tax on annual earnings of more than £12,570, charged at 20 percent. Once earnings exceed £50,270 a year, people pay 40 percent tax on the income above that threshold. When they earn £150,000 or more, people pay 45 percent tax on that income.Now, the 45 percent threshold has been reduced to £125,140 instead, which means those earning £150,000 or more will pay just over £1,200 more in tax every year.Ms Coles said: ‘The cut in the higher rate threshold from £150,000 to £125,140 means more than 200,000 more people will be dragged into the 45 percent bracket, and additional rate taxpayers will pay an average of £1,200 more.’Those on higher wages tend to have more wiggle room in their budgets, but rising prices have created headaches for top earners. Those with big mortgages will feel particular pain from higher mortgage rates too, so this additional tax blow is an unwelcome extra burden.’It’s not a massive money-spinner for the Government, so it’s likely to be more of a symbolic gesture that we’re all in it together.’READ MORE:  Capital gains tax raid may ‘paralyse’ housing market It’s been confirmed the triple lock will be honoured in April 2023 (Image: EXPRESS)It has been confirmed the state pension triple lock will be honoured in 2023. This will afford those who receive the state pension a 10.1 percent increase in their payments, in line with September 2022’s inflation rate.By honouring the triple lock, the highest percentage out of three different values (inflation, wage increases, and 2.5 percent) is used to determine how much the state pension will increase. This is to help ensure the state pension doesn’t lose value in “real” terms.According to investment company AJ Bell, the full-rate state pension should increase from £185.15 per week to £203.85 per week (£10,600.20 per year) from April next year.The basic state pension should rise from £141.85 per week to £156.20 per week (£8,122.40 per year).Helen Morrissey, senior pensions analyst at Hargreaves Lansdown said: ‘After weeks of speculation about whether the triple lock would return next year many pensioners will be viewing today’s news with a sigh of relief.Mr Hunt said: ‘It is expected to benefit over two million of the lowest paid workers in the country and keeps us on track for our target to reach two-thirds of median earnings by 2024. And it is the largest cash increase in the UK’s National Living Wage ever.’However, Ms Streeter commented: ‘A lift in the minimum wage will be another small drop of comfort, but with inflation rising at the 41-year high of 11.1 percent, lower earners are still likely to face huge challenges to cover their rising costs.’Energy bills supportMr Hunt has pledged to stick with the plan to spend £55billion to help households and businesses with their energy bills – a move he described as ‘one of the largest support plans in Europe’.From April, the energy price guarantee will continue for a further 12 months, but at a higher level of £3,000 per year for the average household, instead of October’s £2,500.Mr Hunt said: ‘With prices forecast to remain elevated through next year, this will still mean an average of £500 support for every household in the country.’This comes as analysts at consultancy Cornwall Insight forecast typical annual energy bills to have hit £3,700 from April.For households who use alternative fuels, such as heating oil and LPG, to heat their homes, support will double from £100 to £200. Kwarteng’s stamp duty cuts will be reversed in 2025 (Image: EXPRESS)In an effort to go ‘further’ to support people most exposed to high inflation, Mr Hunt has also announced a cap on social rent.Rents were initially due set at one percent above the September inflation rate, which means that on current plans, Britons could have seen rent hikes next year of up to 11 percent. Instead, social rent increases will be capped at a maximum of seven percent in 2023-24.Mr Hunt said: ‘Compared to current plans, that is a saving for the average tenant of £200 next year.’Stamp dutyIn more unfavourable news to property buyers, Mr Hunt has announced his predecessor, Kwasi Kwarteng’s, stamp duty threshold rise will only remain in place until 2025.Mr Hunt said: ‘The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-budget will remain in place but only until March 31, 2025.’The threshold at which stamp duty was paid doubled from £125,000 to £250,000 – or £425,000 for first-time buyers – in Mr Kwarteng’s budget in September. Discounted stamp duty for first-time buyers was also raised on properties up to £625,000, rather than £500,000.From March 31, 2025, these measures are looking to be reversed under Mr Hunt’s budget.