Autumn budget: what do the new policies mean for employers?

In the autumn budget announced on 17th November, chancellor Jeremy Hunt unveiled a raft of measures designed to deliver a “balanced path to stability”, including the largest ever increase to the national living wage and additional support for those who have left the workforce.

In his speech, the chancellor said: “In the face of unprecedented global headwinds, families, pensioners, businesses, teachers, nurses and many others are worried about the future. So today we deliver a plan to tackle the cost of living crisis and rebuild our economy. Our priorities are stability, growth and public services.” He added that the announcement included some “difficult decisions”.

Following the announcement of the new policies, here are a few pointers.

National wage to increase

The national living wage for workers over 23-years-old will grow by 9.7 per cent to £10.42 an hour from April 2023, the chancellor has said. The move is expected to benefit more than two million of the UK’s lowest-paid workers – a change that has, for the most part, been welcomed, although some suggest self-employed individuals have been forgotten.

Those with low salaries will welcome the increase, but small businesses may find it very challenging to fund this necessary rise on top of other increasing prices, says Ben Willmott, head of public policy at the CIPD. “If the government and smaller enterprises, which are already under pressure to accomplish more with less, are to be able to afford this increase, they must prioritise enhancing corporate efficiency.”

Support for those who left the workplace

Hunt said the Department for Work and Pensions had a critical role in supporting people into work, and pledged to invest £280m into the department to help crack down on benefit fraud, as well as investing a further £11bn in benefits. He continued by committing to undertake a thorough review of adults who have left the workforce and to improve their prospects of landing a job. People receiving universal credit will be advised to routinely meet work coaches.

National insurance and inheritance tax frozen

Further announcements in today’s budget include that the national insurance and inheritance tax thresholds would remain unchanged for an additional two years, until April 2028, while the £150,000 top income tax rate level will be reduced to £125,140.

As well as retaining the pension triple lock and hiking the state pension to £871 to keep up with inflation, Hunt also promised a rise to the pension credit of 10.1 per cent.