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Autumn Statement 2022 Summary

Taxation and wages

• UK minimum wage for people over 23 to increase from £9.50 to £10.42 an hour
• Top 45% additional rate of income tax will be paid on earnings over £125,140, instead of £150,000
• Income tax personal allowance and higher rate thresholds frozen for further two years, until April 2028
• Main National Insurance and inheritance tax thresholds also frozen for further two years, until April 2028
• Tax-free allowances for dividend reduced to £1,000 next year and £500 from April 2024. Capital gains tax reduced to £6,000 next year and £3,000 from April 2024

Energy

• Household energy price cap extended for one year beyond April but made less generous, with typical bills capped at £3,000 a year instead of £2,500
• Households on means-tested benefits will get £900 support payments next year
• £300 payments to pensioner households, and £150 for individuals on disability benefit
• Windfall tax on profits of oil and gas firms increased from 25% to 35% and extended until March 2028
• New “temporary” 45% tax on companies that generate electricity, to apply from January

The economy and public finances

• The Office for Budget Responsibility judges UK to be in recession, meaning the economy has slowed for two quarters in a row
• It predicts growth for this year overall of 4.2%, but size of the economy will shrink by 1.4% in 2023
• Growth of 1.3%, 2.6%, and 2.7% in 2024, 2025 and 2026
• UK’s inflation rate predicted to be 9.1% this year and 7.4% next year
• Unemployment expected to rise from 3.6% to 4.9% in 2024
• Government will give itself five years to hit debt and spending targets, instead of three years currently

Government spending

• Defence spending to be maintained at 2% of national income – a Nato target
• Overseas aid spending kept at 0.5% for the next five years, below the official 0.7% target