Autumn Statement 2023: what to expect
What is the Autumn Statement?
Since 1975 the government has been obligated by law to provide two ‘economic statements’ each year. The first of these statements is known as ‘The Budget’, where the Chancellor lays out the state of the UK’s public finances and the ‘fiscal’ (which just means ‘tax’) plan for the year.
The other statement is usually six months after The Budget. The timing of both statements has been a moveable feast in recent years and we have had Spring, Summer and now Autumn Statements.
Recent Autumn Statements have typically been quite dull affairs. That was, until last year when we had the infamous ‘mini-budget’. While the same level of drama and chaos is certainly not expected this year, the Autumn Statement on the 22nd November is likely still worth tuning in to. The big rumour is around ‘ISA simplification’. Here’s what that could mean.
There has been a lot of speculation around a package of measures known as ‘ISA simplification’. The rumours so far have focused on a few key areas.
These include merging the Cash ISA and the Stocks & Shares ISA into one account, and removing the rules around only being allowed to contribute into one of the same type of ISA each tax year. There’s also expectations around increasing various annual ISA allowances, on top of some welcome changes to the Lifetime ISA – including a review of the Lifetime ISA price cap.
While the government is keeping its cards very close to its chest ahead of the statement, it’s our understanding that they want to make it easier for the public to choose between different types of ISA, which also applies to helping them decide between whether they should be saving their money as cash or investing it.
Rest assured, we’ll be in touch with our customers directly if any changes that are brought in affect them and their accounts.
The work we’ve been doing to campaign for our customers
For the better part of a year, Moneybox has been meeting with key decision makers and telling the stories of our customers and our products. We’ve contributed to a number of HMRC and Treasury roundtables, as well as industry working groups on topics including ISA simplification and future proofing the Lifetime ISA.
We’ve met with dozens of politicians, officials, and other key stakeholders, all with the aim of helping them better understand the saving, investing, retirement, and home-buying goals of our customers – and how best to achieve them.
As the leading provider of Lifetime ISAs in the UK, we’ve supported more than half a million aspiring first-time buyers as they save their deposit, and we’ve helped nearly 70,000 people buy their first home far sooner than would otherwise have been possible.
Every day, we see just how invaluable the Lifetime ISA has been to a whole generation of first-time buyers. In the last year alone, we’ve seen a 43% increase in the number of young savers opening a LISA to achieve the important life goal of buying their first home.
So, when it comes to the Lifetime ISA, we have been particularly clear: it’s a fantastic product that’s helped a new generation of aspiring first-time buyers save and invest their way towards a deposit.
It’s vital to build on this success, but future proofing the Lifetime ISA should now be a real priority. Here’s how we think the government can achieve this:
- Ensuring that the Lifetime ISA remains fit for purpose for the next generation of aspiring homebuyers by committing to an annual review of the Lifetime ISA price cap in line with house price inflation.
- Introducing a penalty-free annual ‘Emergency Withdrawal Allowance’ so that Lifetime ISA savers are not penalised if they need their money in an emergency.
These changes will provide some much-needed reassurance and peace of mind to savers who live and work in some of the most expensive parts of the UK, and ensure the product remains fit for purpose for all those who need it most.
We have made the case for Moneybox customers in these areas hundreds of times, and we’ll continue to do so into the future. It’s worth acknowledging that we may not get exactly what we’re asking for, and we don’t expect these changes to apply to withdrawals made in the past. However, our proposals have been well received.
With the Autumn Statement around the corner and an election on the horizon, it won’t be long before we have greater clarity on the measures that will be taken to support the needs of first-time buyers in the future.
Once the Autumn Statement has been announced, we’ll be in touch with our customers as soon as possible to let them know what any upcoming ISA changes might mean for them.
A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.