The winners and losers in the Autumn 2024 budget
Today’s 2024 Budget included major changes to National Insurance, Capital Gains and even the price of pints and tobacco.
Some will benefit more than others, while some will find themselves worse off as a result of the changes announced by Chancellor Rachel Reeves.
Who are the winners and losers from the Labour government’s first budget?
Winners
Minimum wage workers will benefit from a 6.7% increase of the minimum wage to £12.21, which comes into force next year.
This will mean an extra £1,400 a year for full-time workers on the minimum wage.
Reeves called this a ‘significant step’ towards delivering a ‘genuine living wage for working people’, but it falls short of the £12.60 per hour living wage calculated by the Living Wage Foundation.
It’s even less for younger people, with those ages 18-20 seeing an increase of £1.40 to £10 an hour.
Carers will be allowed to earn more without losing their carer’s allowance. This means they can work the equivalent of 16 hours a week on minimum wage, earning more than £10,000 a year.
Reeves said: ‘Carer’s allowance currently provides up to £81.90 per week to those with additional caring responsibilities.
‘Today, I can confirm that we are increasing the weekly earnings limit to the equivalent of 16 hours at the national living wage per week, the largest increase since carer’s allowance was introduced in 1976.
‘That means a carer can now earn over £10,000 a year while receiving carer’s allowance, allowing them to increase their hours where they want to and keep more of their money.’
Station pensions are rising 4.1% next year, giving state pensioners £230.30 each week as the new flat-rate benefit.
But you with income thresholds still frozen, you will be taxed on income from 2027 if you receive just the state pension.
Reeves said: ‘The pension credit standard minimum guarantee will also rise by 4.1%, from around £11,400 per year to around £11,850 for a single pensioner.’
Good news for pub-going beer drinkers, who’ll save a whole penny off the cost of their pints thanks to the Chancellor announcing a cut to draught beer duty. That’s if pubs actually pass on the saving to customers.
The Chancellor also announced a freeze to fuel duty, meaning drivers continue to benefit from the 5p-per-litre cut in fuel duty introduced by the Conservatives in 2022.
However, this freeze means the Government misses out on £3billion in tax revenues it could otherwise spend elsewhere.
Losers
Are you a family dealing with inheritance? Well it’s been rough budget for you.
From April 2027, you’ll have to pay inheritance tax on inherited pension pots. An inheritance tax threshold due to expire in 2028 has been extended to 2030.
On top of that, relief on inheritance of agricultural land and family businesses will also be capped. They’ve previously been exempt from tax.
Employers will have to pay national insurance contributions 1.2 percentage points higher than previously from April.
Plus, Reeves said: ‘We will reduce the secondary threshold – the level at which employers start paying national insurance on each employee’s salary – from £9,100 per year to £5,000.
‘This will raise £25 billion per year by the end of the forecast period. I know that this is a difficult choice. I do not take this decision lightly.”
The Chancellor added: ‘Successful businesses depend on successful schools. Healthy businesses depend on a healthy NHS. And a strong economy depends on strong public finances.’
Investors are facing a tax hike too, with the lower rate of Capital Gains Tax (CGT) rising from 10% to 18%.
The higher rate is rising from 20% to 24%. Charged on the profit from selling an asset that’s increased in value, it applies to things like stocks and second homes.
Speaking of second homes, landlords will also face a higher stamp duty land tax surcharge for buying those.
It is rising by two percentage points to 5% from Thursday.
Reeves said: ‘In our manifesto, we committed to reforming stamp duty land tax to raise revenue while supporting those buying their first home.
‘This will support over 130,000 additional transactions from people buying their first home, or moving home, over the next five years.’
Unsurprisingly for a government keen to cut smoking, this budget counts smokers and vapers among its losers.
The tax on hand-rolling tobacco will increase by 10%. A flat rate levy will also be imposed on all vaping liquids from October 2026.
Last but not least, the government is abolishing the non-dom tax regime from April.
Reeves said: ‘In our manifesto we made a number of commitments to raise funding for our public services.
‘First, I have always said that if you make Britain your home, you should pay your tax here.
‘So today, I can confirm, we will abolish the non-dom tax regime and remove the outdated concept of domicile from the tax system from April 2025.’
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