22/11/16Autumn Statement 2016 – The Winners & Losers
Every Autumn Statement and Budget speech leaves some of us better off, whilst others won’t be so impressed with the changes announced by the Chancellor.
Here’s our initial take on who are the main winners and losers after Philip Hammond’s first, and indeed last, Autumn Statement.
Mr Hammond announced that letting agents will no longer be able to charge fees to tenants for renting a property.
On the face of it, this will save tenants potentially hundreds of pounds when they move house. However, some experts are nervous that landlords, who it is expected will have to pay these fees in future, will simply push up rents to cover their increased expenditure.
People with pensions
The Chancellor announced a ban on cold calling in relation to pensions. Such a ban will help to reduce the number of people scammed out of their pension or mis-sold unsuitable investments, and must be welcomed.
The National Minimum Wage will rise to £7.50 from April 2017. Mr Hammond also confirmed that the Personal Allowance, the amount we can all earn each year before we start to pay Income Tax, will rise to £11,500 in April 2017 and to £12,500 by 2020.
The planned rise in fuel duty has been cancelled for the seventh year in succession.
However, drivers will be hit by a 2% rise in Insurance Premium Tax.
The Chancellor announced a new three-year bond from National Savings & Investments (NS&I) which is predicted to pay an interest rate of 2.2% per year. If the rate is confirmed, the bond will pay nearly 1% more than the best current, like for like, alternative.
Mr Hammond had the unenviable task of announcing range of negative economic data:
- Borrowing in 2016 and 2017 will be significantly above the level previously predicted
- Growth will slow
- The goal of returning the economy to surplus by 2019/20 has been abandoned
The Chancellor also confirmed that the effects of Brexit is likely reduce growth by 2.4%.
Whilst the Triple Lock, which means the Basic State Pension rises by the greater of inflation, earnings or 2.5% will remain until the end of this parliament. It t is clear though that it may be up for debate past 2020 as the government gets to grips with an aging population.
Employees who use salary sacrifice
Employees will no longer be able to reduce their salary to pay for a range of benefits and perks, thereby saving Income Tax and National Insurance.
Whilst some benefits, such as pensions and childcare, will be excluded, the popularity of such schemes means the clampdown will affect many thousands of employees.
One look at the fall in the share price of some leading letting agents tells us all we need to know about whether the ban on being able to charge tenants fees is good news for their business.
And finally…economists, journalists and financial commentators
The Chancellor announced that this was to be his first and last Autumn Statement and that it would now be abolished.
The Budget will, after Spring next year, will be moved to the Autumn.
Those people who comment on such matters, including ourselves, will just have to find something else to do instead!