The National Living wage, for employees aged 21 and over will rise from £11.44 an hour, to £12.21 For those aged 18,19 or 20, the National Minimum Wage will go up from £8.60 an hour, to £10. For those aged 16 or 17, the minimum wage will rise from £6.40 an hour to £7.55. This also included the separate apprentice rate which applied to eligible people under 19 or those over 19 in the first year of an apprenticeship, with an increase from £6.40 an hour, to £7.55.
Businesses are warning that this could contribute towards are larger financial burden on employers, further being impacted by the increase in National Insurance Contributions that many employers will have to make.
National Insurance Contributions for employees will rise from 13.8% to 15%, and the threshold at which businesses start paying NI on workers’ earnings will be lowered from £9,100 to £5,000. Although National Insurance paid by employees will not change, businesses warn that this may reduce employees’ chances of finding employment or getting a pay rise due to the financial impact employers will face.
Due to the increase in minimum wage rates for 18. 19- and 20-year-olds, this will be a welcome erosion of the pay gap for those aged under 21, many of whom have the same financial responsibilities as older employees.
In terms of welfare benefits, as expected we will see a rise by 1.7% in April, in line with inflation. Universal Credit will increase for single people aged under 25 by £5.30 a month to £317, and for a couple aged over 25, the rise is likely to be £10.50 to £628 a month. For single claimants over 25 the increase is expected to be from £393.45 to £400.14 per month. For couples on a joint claim under 25 the increase will likely be from £489.23 to £497.55 per month.
The chancellor announced that there would be a widespread review of health and disability benefits.
The earnings threshold for Carers Allowance will increase from £151 per week to £196 from April 2025 and will be ‘pegged’ to the equivalent of 16 hours at National Living Wage moving forward. The earnings threshold is the threshold that caps how many hours a person works whilst carrying out a caring role under Carers Allowance. This is a £45 increase to the threshold which will be a welcome addition to the approx. 5.7 million Carers in the UK balancing work and caring duties.
Personal independence payment (PIP) will rise for the Daily living component from £108.55 to £110.40 (enhanced) or from £72.65 to £73.89 (standard). The Mobility component will increase from £75.75 to £77.04 (enhanced) or from £28.70 to £29.19 (standard).
Employment support allowance (ESA) will increase for:
⦾ Under 25s (single) from £71.70 to £72.92
⦾ Over 25s (single) from £90.50 to £92.04
⦾ Lone parent (under 18) from £71.70 to £72.92
⦾ Lone parent (18+) from £90.50 to £92.04
Attendance Allowance will rise from £108.55 to £110.40 for the higher rate and from £72.65 to £73.89 for the lower rate.
Disability living allowance (DLA) for under 16s and older people who are eligible:
DLA will increase from £108.55 to £110.40 for the highest amount. From £72.65 to £73.89 for the middle amount, and from £28.70 to £29.19 for the lowest amount. The mobility component will rise from £75.75 to £77.04 for the higher amount. The lower amount for the mobility component has increased from £28.70 to £29.19. The state pension will rise in line with average earnings, going up by 4.1% in April.
In terms of the new state pension, this is expected the increase to £230.30 per week. This will take it to £11,975 a year, which equates to a rise of £473 compared to now.
For those claiming the basic state pension (those who reached state pension age before April 2016), it is expected to increase to £176.45 per week. That will take it to £9,175 a year, a rise of £361 compared to now.
We will also see an increase in benefit rates for New Style Jobseekers Allowance, Child Benefit, Maternity/paternity/adoption and shared parental pay and maternity allowance.
Housing benefit is also expected to increase for Single persons of pension age from £235.20 to £239.20, Lone parents of pension age from £235.20 to £239.20, Couple (one or both) pension age from £352 to £357.98, Dependent child/young person under 20 from £83.24 to £84.66.
Stamp duty on purchases of second homes, buy-to-let properties, and companies purchasing residential properties will increase from 3% to 5%.
Analysts have warned that this could lead to fewer properties purchased by landlords and the rents could rise in tenants remaining homes.
The Chancellor also vowed to clamp down on benefit fraud, unveiling new powers for the DWP, including direct access to bank accounts. Reforms to the Work Capability Assessments on Universal Credit will still go ahead, despite concerns from campaigners and leading charities.
The Winter Fuel Payment will remain unavailable to pensioners not claiming pension credit, and the 2-child limit on Universal Credit will remain in place.
The first Labour Budget in nearly 15 years was touted by some as a ‘reset’ of the economic landscape. Whilst we welcome some measures, like those to help the lowest paid and believe this will address some of the issues the Society Matters Group assist people with, one budget cannot be a ‘magic bullet’ that solves all of the economic issues facing our region and the wider country. We’re proud to say we’ll continue to be here to do our part in helping achieve our mission of ‘a fair society for all, with lives well lived.’
