Get ready for the autumn budget – what you need to know
With the chancellor’s autumn budget just days away, now’s the time to prepare for what’s ahead and think about how the financial changes might affect you.
The budget on 30 October will be the Labour government’s first in 14 years.
What is the budget?
Every year, the chancellor – who is in charge of the government’s finances – announces a budget statement in the House of Commons. It includes big decisions like raising or lowering taxes and spending on things like schools, the NHS, police and other public services.
How could the budget affect your finances?
The new government has said many times that they need to make ‘difficult decisions’ to fill a £22bn ‘black hole’ in public spending, left by the last Conservative government.
There’s been a lot of speculation about what the budget could include. Here are some predictions that could affect your finances.
Changes to winter fuel payments
We already know that winter fuel payments will now only be available to pensioners who get pension credit or other means-tested benefits.
This could leave over 10 million pensioners without the crucial payment. Charities, unions, and some MPs worry that low-income pensioners who don’t get any benefits will struggle with heating bills.
Possible rise in fuel duty
The government may end the freeze on the 5p fuel duty – the tax taken from all fuel sold in the UK – that’s been in place since 2012, maybe even increasing it by 10p per litre.
If this happens, each tank of petrol could cost an extra £6.60. This would hit low-income households hardest since they tend to spend a larger portion of their income on fuel.
No increases to key taxes
The chancellor has ruled out increasing VAT, national insurance, and income tax, promising not to raise taxes on ‘ordinary people.’
Keeping the state pension triple lock
If you receive the state pension, you’ll be glad to know that the ‘triple lock’ will likely remain in place.
The triple lock is the government’s guarantee that state pensions will grow each year in line with whichever is the highest out of the following:
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the average growth measured from May to July compared to the previous year
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the consumer prices index (CPI) measured in the year from September
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or 2.5%
How much will the state pension be worth?
This adjustment – set to happen in April 2025 – could increase the state pension to:
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£230.30 a week for the full, new flat-rate state pension (if you reached state pension age after April 2016)
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£176.45 a week for the full, old basic state pension (if you reached state pension age before April 2016)
How to prepare your finances ahead of the budget
If you’re of state pension age, consider checking your eligibility for pension credit, which could qualify you for the winter fuel payment and other support.
According to the government, around 880,000 people are eligible for pension credit but aren’t claiming it.
Pension credit can add an average of £3,900 annually to your income and ensure you receive additional support like the winter fuel payment.
Eligible pensioners can receive between £200 and £300 towards their heating bills this winter, depending on their age.
Pensioners receiving either pension credit or one of the following means-tested benefits will receive the winter fuel payment:
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universal credit
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income support
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income-based jobseeker’s allowance
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income-related employment and support Allowance
Do you need money advice
There’s a lot of uncertainty right now about how your benefits and taxes could change. It’s natural to worry about the future.
If you’re not sure how to handle your money situation, we can help.
We give free, impartial money advice online or over the phone. If you get in touch, we can check your benefits entitlements, help you make a budget you can stick to, or advise you on solutions if you’re in debt. Some solutions are free, others have a fee.
Use our budget planner
You can always take advantage of our free budget planner to see how your finances shape up and where you could save money.
Gabrielle Pickard Whitehead
Gabrielle is an experienced journalist, who has been writing about personal finance and the economy for over 17 years. She specialises in social and economic equality, welfare and government policy, with a strong focus on helping readers stay informed about the most important issues affecting financial security.
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