National Insurance And Benefits Changes

23rd November 2023

Main rate of National Insurance cut from 12% to 10% from 6 January, affecting 27 million people.

Class 2 National Insurance - paid by self-employed people earning more than £12,570 - abolished from April.

Class 4 National Insurance for self employed - paid on profits between £12,570 and £50,270 - cut from 9% to 8% from April.

Legal minimum wage - known officially as the National Living Wage - to increase from £10.42 to £11.44 an hour from April.

New rate to apply to 21 and 22-year-old workers for the first time, rather than just those 23 and over.

Universal credit and other working-age benefits in England and Wales to increase by 6.7% from April, in line with September's inflation rate
Local Housing Allowance rates - which determine the level of housing benefit and Universal Credit people receive to pay rent in Great Britain - to be unfrozen and increased to 30% of local rents.

Work Capability Assessment to be reformed to reflect availability of home working after Covid pandemic.

Funding of £1.3bn over the next five years to help people with health conditions find jobs.

Further £1.3bn to help people who have been unemployed for over a year.

Claimants in England and Wales deemed able to work who refuse to seek employment to lose access to their benefits and extras like free prescriptions.

State pension payments to increase by 8.5% from April, in line with average earnings.

Consultation on whether savers get the right to pick the pension scheme their employer pays into - possibly allowing them to have one pension pot for life.

Chancellor's package includes 110 measures aimed at boosting economic growth.

The independent Office for Budget Responsibility (OBR) expects the economy to grow by 0.6% this year and 0.7% next year, rising to 1.4% in 2025; then 1.9% in 2026; 2% in 2027 and 1.7% in 2028.

It forecasts that inflation - the rate prices are rising - will fall to 2.8% by the end of 2024, before reaching the Bank of England's 2% target rate in 2025.

Living standards not expected to return to pre-pandemic levels until 2027-28.

Underlying debt forecast to be 91.6% of GDP next year; 92.7% in 2024-25; 93.2% in 2026-27; before declining to 92.8% in 2028-29.

Borrowing forecast to fall from 4.5% of GDP in 2023-24; to 3% in 2024-25; 2.7% in 2025-26; 2.3% in 2026-27; 1.6% in 2027-28 and 1.1% in 2028-29