Hear from Brian, our Head of Personal Finance, as he breaks down what’s changed and how it might affect you and your personal finances.


“The government laid the groundwork for this Autumn Statement well in advance. We have heard for weeks about the various challenges the UK faces and the ‘black hole’ in our finances that needs to be filled. As such, there was no chance of this being billed as a ‘mini-budget’ like that of the Chancellor’s short-lived predecessor Kwasi Kwarteng in October.

On the face of things, it may seem like Mr Hunt does seem to have broadly lived up to his promise that those with the broadest shoulders should carry the heaviest burden of tax rises. The Chancellor has significantly expanded the windfall tax on energy companies, reduced the threshold at which the 45% tax rate is due and increased the tax burden on dividend recipients.

Meanwhile he has increased the state pension and benefits in line with inflation, extended the energy price guarantee and mandated a rise in the national living wage; all of which should help those struggling the most in the cost of living crisis.

However, the sting in the tail for all of us comes in the freezing of income tax thresholds. As this is a ‘stealth tax’, nobody will see an immediate rise in their tax bills and therefore, measures such as these often slip under the radar.

This announcement may have the biggest impact over the coming years as millions of people will unwittingly move into higher tax bands and may see significant proportions of any future salary increases taken in tax.”


What was in the Autumn Statement?



Freezing income tax allowances

The threshold at which you start paying a higher rate of tax has been frozen for a further 2 years, until 2028. If you start to earn over £50,271 you begin to pay 40% tax on earnings above that amount rather than 20% tax on income below that level.

The freezing of this threshold means more and more people will start paying a higher rate of tax as wages tend to rise on an annual basis.

This is known as a ‘stealth tax’ because you won’t notice it immediately. There will be no change to your pay cheque today but any future pay rises you might get may be taxed at a higher rate.


Stamp duty

The stamp duty cuts implemented by former Chancellor Kwasi Kwarteng now only be in place until March 2025. The Office for Budget Responsibility is now forecasting a 9% drop in house prices next year so the Chancellor hopes that this will help to support the housing market and those that work in it.

These increased thresholds mean that a first-time buyer who purchases a property at the average price in England or Northern Ireland will pay no stamp duty at all. This removes one of the biggest upfront costs of buying a home.

The government’s hope is that this will help to support the housing market at a time when the high cost of living and rising mortgage rates might cause buyers to hesitate.


Capital gains tax

This is the tax you’ll pay on any profits you’ve made when you sell an asset, like your investments or a second property.

The capital gains allowance has been cut from £12,300 currently to £6,000 from April 2023 and £3,000 from April 2024. This will increase the cost of selling assets that aren’t held in a tax wrapper (like a Stocks & Shares ISA).

In reality, a very small proportion of the population actually pays capital gains tax on an annual basis because most people hold their investments in ISAs and pensions, and also no capital gains tax is due on your home (principal primary residence).

However, anyone selling a business, a second property or significant investments outside of a tax wrapper will face higher capital gains tax bills after today’s announcement.



The dividend allowance has been cut from £2,000 to £1,000 from April 2023, then cut again to £500 from April 2024. This is the amount of dividends you can earn before you have to start paying tax.

For people with investments, this will only impact you if you hold your investments outside of an ISA or a pension, as the purpose of these wrappers is to protect you from paying tax.

This change to dividend taxation will have the most impact on the self employed who pay themselves dividends from their companies. They will likely see an increase in their tax bills as more of their income will be subject to tax.


Additional rate of tax

The threshold at which you pay the highest rate of income tax has been reduced from £150,000 to £125,140. Any income earned above £125,140 will be taxed at 45%, costing the highest earners an additional £1,243 of income tax a year.


Freezing inheritance tax nil rate band

The first £325,000 of an estate can pass on to beneficiaries tax-free when someone dies – this is known as the ‘nil rate band’. This has been frozen for another 2 years until 2028, again likely dragging more people into paying inheritance tax as inflation increases the value of people’s estates over the coming years.


Cost of living

Raising the national living wage

The national living wage will increase by 9.7% to £10.42 and will come into effect next year. This will be a welcome boost for millions as they see their pay packets boosted from April 2023.

This will however increase the pressures on businesses at a time when the cost of material is rising because of inflation and a looming recession is putting downward pressure on demand.


Energy price guarantee

The energy price guarantee has been extended beyond the planned end date of April 2023. However, the cap will rise from £2,500 to £3,000. Without the cap it was anticipated that average annual energy bills could rise to over £4,000.

The cap will now last until April 2024, and much of the funding for this measure will come from an extended windfall tax on energy companies.



State pension

After much debate and rumour, the state pension and Universal Credit will increase by inflation (10.1%).

The ‘triple lock’ which agrees to increase the state pension by the highest of inflation, wage growth or 2.5%, has been maintained.

This will see the state pension rise from £185 a week to £203 a week.