It has been confirmed that the minimum wage will be rising for minimum wage workers of all ages. For those over 23 years old it will be going up from £8.91 to £9.50 an hour. This would bring the national minimum wage in line with the Living Wage Foundation's current recommendation of £9.50 an hour. Which will hopefully help people deal with the increase in the cost of living. For those younger than 23 the minimum wage will still be increased by the same percentage. 21- to 22-year-olds will have a rise from £8.36 to £9.18. 18- to 20-year-olds will have an increase from £6.56 to £6.83 and for workers younger than 18 it will be from £4.62 to £4.81. This pay rise will happen on April 1st.
The “taper rate” refers to the rate at which Universal Credit claimants who are working have their benefits reduced as they earn more. The chancellor confirms that the universal credit taper rate will be cut from 63% to 55%. Now for every pound earned over the work allowance amount that a claimant has, 55p will be lost from their benefits. This is intended to tackle the rising cost of living and is said to be in place "within weeks”, at the most it will be brought in no later than December 1st.
As previously mentioned, the government will be making the living wage £9.50 an hour, which is expected to produce a raise for those workers of £1,000 a year. However, that amount is an estimate of before taxes. After taxes, including NI, the amount could be around £700 and for those on Universal Credit it could be even less at around £300 even with the taper rate cut. Many feel that they benefitted more from the £20 uplift that ended just three weeks ago. Since this only affects those who are currently working it will not impact those who are out of work or unable to work.
The economy is predicted to return to pre-Covid levels by next year, while the spending of 0.7% on foreign aid is set to be reinstated by 2024-25. Unemployment rates are forecast to peak at 5.2% which is lower than the 11.9% that was previously predicted for next year.
Throughout the pandemic, shops, restaurants, bars, gyms and other businesses in the hospitality and leisure sector have been hit hard. In the 2022-23 tax year, a temporary 50% cut in their business rates, can be claimed on their bills, up to a maximum of £110,000.
The UK’s research and development (R&D) tax relief scheme will now include cloud computing and data costs.
Taxes on alcoholic drinks such as, sparkling wine, draught beer and cider will be cut, while tax will be rising for stronger drinks such as red wine and fortified wines. This follows a simpler principle, the stronger the drink the higher the tax. The previously planned increase in duty on wine, spirits, beer, and cider that was due to take effect on Wednesday has been cancelled.
The recent forecast for inflation is that it will average out at 4% next year. Inflation measures the change in the cost of living over time. Although, the Office for Budget Responsibility has warned that inflation could hit up to 5% before it starts to go back down. This is likely to be caused by supply chain problems as factories come out of lockdown that have been complicated further by The UK leaving the European Union. There has also been an increase in the demand for energy and the energy price cap has risen which has allowed for suppliers to have a higher maximum price that they can charge domestic customers.
There haven’t been any measures taken to assist householders with the rising domestic gas and electricity bills.
Schools will receive an extra £4.7 billion by 2024-25 in addition to £2 billion of new funding to support schools and colleges as they recover from the pandemic. It has also been announced that £300m will be spent on a parenting programme named "Start for Life". This is expected to help support new and expecting parents. An additional £170m by 2024-25 will go into childcare.