Autumn Statement 2016: What it means for you and your money

Philip Hammond's support for 'just about managing' families include freezing fuel duty and increasing the national minimum wage

Zlata Rodionova
Wednesday 23 November 2016 17:00
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Government increase living wage

Chancellor Philip Hammond has given his first Autumn Statement aimed to help families who are ‘just about managing’.

In his first major economic speech since the UK voted to leave the EU, the Chancellor reiterated that “Britain is open for business” and pledged to “build an economy that works for everyone”.

His statement including major announcement on housing, benefits and tax.

So what does it mean for you and your finances?

Pay rises for minimum wage earners

Employees might go to work with a spring in their step if their working day was reduced

The minimum wage for over 25s will rise by 4 per cent from £7.20 to £7.50 in April 2017.

This is a smaller rise than had been predicted earlier in the year.

However, it will still be the equivalent of a pay rise worth over £500 a year to a full-time worker.

A new saving account

Keep an eye on the pennies

Savers will be happy to hear a new 2.2 per cent savings account is being launched through National Savings and Investments letting customers save up to £3,000.

The account is subject to a minimum investment limit of £100.

The equivalent best-buy three-year bond on the market now pays interest of 1.62 per cent.

Mr Hammond said he expects two million people to benefit.

Ban on letting agent fees and more homes

The UK’s home ownership rate for those aged 25-34 fell from 59 per cent in 2002 to 37 per cent by 2014

Tenants will no longer be required to pay upfront fees that average £337, in a change aimed at helping the 4.3 million households that are living in private rental housing.

“Landlords appoint letting agents and landlords should meet their fees,” Hammond said.

The change should be introduced “as soon as possible”.

Mr Hammond has also announced the Government is investing £1.4bn in an effort to deliver 40,000 of new affordable homes.

Hannah Maundrell from comparison site, money.co.uk, said: "There’s little doubt tackling this ridiculous ‘tax’ on renters will make it easier and more affordable for people to move without having to borrow cash to cover the cost. The fact some people have to resort to payday loans for moving fees simply can’t continue.

"Scrapping letting agents fees is a smart move but the government need to make sure they think about damage limitation. Landlords could simply hike rents if they’re made to pay the difference."

Employee perks set to cost more

Scientist have developed a test which predicts whether you'll live for another ten years

People who buy their gym memberships and mobile phone deals through a work benefit scheme are set to pay more.

Salary perks allow some employees to give up some of their salary in exchange for goods and services, with both the company and worker paying less tax.

Mr Hammond described the perks as “unfair” and has abolished many – excluding child care, ultra-low emission cars and cycling to work – from April next year.

Motoring costs

Fuel duty will be frozen, which means there will be no immediate rise in petrol and diesel prices.

Mr Hammond said this would save the average car driver £130 and the average van driver £350 a year.

Environmental drivers will also have a boost with more charging point being put in.

However, insurance premium tax is set to rise from 10 to 12 per cent. That means a 2 per cent on the cost of vehicle insurance and possible increases on home and travel insurances.

Ms Maundrell of money.co.uk, said: "Yet another hike in Insurance Premium Tax seems crazy as it will add £51 to the average household's insurance bill. The cost of insurance is expected to rise anyway - this will make it so much worse."

Pay rises for minimum wage earners

The minimum wage for over 25s will rise by 4 per cent from £7.20 to £7.50 in April 2017. This is a smaller rise than had been predicted earlier in the year.

However, it will still be the equivalent of a pay rise worth over £500 a year to a full-time worker.

Fewer cold calls and scams

Illegal calls are now those deemed a ‘nuisance’, rather than a cause of ‘serious distress’

Almost 11 million pensioners are targeted by as many as 250 million cold call scams a year.

Under Mr Hammond’s plan, all calls where a business has no existing relationship with the individual will be forbidden.

The ban, which could be enforced with fines of up to £500,000, will not cover texts and emails.

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