Autumn Statement 2016 highlights

A boost for savers, a clampdown on pension scams and fuel tax is frozen, again.

1. New savings bond

To support savers, NS&I will offer a new three-year Investment Bond with an indicative rate of 2.2 per cent from spring 2017. The bond will offer the flexibility to put away between £100 and £3,000 and be available to those aged 16 or over.

However Hannah Maudrell at warns we shouldn't get too excited: "While the headline rate is better than you can get on a three year account now, tying up your cash for that long could actually be the savings equivalent of shooting yourself in the foot. With inflation expected to rise to nearly 3 per cent next year, cash in these accounts could actually lose buying power so you might be better off with a high interest current account instead."

2. Pensions scams crackdown

There is to be a crackdown on pensions scams, including banning businesses from cold calling someone about their pension. This includes scammers targeting people who inadvertently ‘opt-in’ to receiving third party communications. Use our 5-minute guide to keep your retirement money safe from fraudsters.

The Chancellor also announced that the triple lock on pensions will stay for now but ‘spending priorities’ will be reviewed in the next parliament. The triple-lock guarantees that pensions rise by the same as average earnings, the consumer price index, or 2.5 per cent, whichever is the highest.

3. Fuel duty frozen

In 2017, fuel duty will remain frozen for the seventh successive year, saving drivers £130 a year on average.

4. Tax thresholds to rise

The Personal Allowance is the amount of income you can earn before you start paying income tax. The Personal Allowance will rise from £11,000 to £11,500 in April 2017, going up to £12,500 by 2020. The Higher Rate Threshold will increase from £43,000 this year, to £45,000 in 2017-18 and be £50,000 by 2020-21.

5. The National Living Wage and the National Minimum Wage increase

The National Living Wage for those aged 25 and over will increase from £7.20 per hour to £7.50 per hour. That means over £1,400 a year more for a full-time worker previously on the National Minimum Wage says Hammond.

6. The Universal Credit taper will be reduced

With Universal Credit, as a person’s income increases, their benefit payments are gradually reduced. The taper rate calculates the reduction in benefits as a person’s salary increases.

Currently, for every £1 earned after tax above an income threshold, a person receiving Universal Credit has their benefit award reduced by 65p and keeps 35p. They will now keep 37p for every £1, from April 2017. The government says three million households will benefit from this change. For instance, a disabled person receiving support with their housing costs and earning £12,000 a year will benefit by £180 a year.

7. Letting agents’ fees banned for tenants

Letting agents will no longer be able to charge renters fees in England, for example when they sign a new tenancy agreement. This will stop tenants being hit with fees averaging £223 per tenancy. The government will consult on this in due course.

8. Invesment in infrastructure and innovation

A new National Productivity Investment Fund will provide £23 billion of additional spending, ensuring 'the UK's economy is fit for the future' . The fund will be used for projects such as upgrading roads; developing an expressway connecting Oxford and Cambridge and £1 billion is to be invested in full-fibre broadband and trialling 5G networks.

9. Millions to support culture and heritage projects

£7.6 million will cover urgent repairs to the heritage house, Wentworth Woodhouse in South Yorkshire. Other cultural projects to be supported, include £850,000 for a Royal Society of the Arts pilot to promote cultural education in schools, £1.6 million to help complete Studio 144, an arts complex in Southampton.

10. Salary sacrifice benefits to be taxed

From April 2017, most salary sacrifice schemes will be subject to the same tax as cash income. In salary sacrifice schemes, employees exchange some of their salary for a non-cash benefit in kind (such as a mobile phone). Both the employer and employee make a tax saving, because the benefit is taxed less than a salary or not taxed at all. Pensions, childcare, Cycle to Work and ultra-low emission cars will all be exempt.

11. Insurance Premium Tax to increase

Insurance Premium Tax (IPT) will increase from 10 per cent to 12 per cent from June 2017, adding £51 to the average household's insurance bill. IPT is a tax on insurers and it is up to them whether and how to pass on costs to customers.

Kevin Pratt at MoneySuperMarket says this is grim news for Britain's households, affecting car, home and pet insurance: "IPT is now double what it was this time last year - prudent consumers will be outraged and quite rightly so. Let's not forget car insurance is a legal obligation - Mr Hammond knows drivers have nowhere to hide. This is even more reason for motorists to shop around to ensure they're getting the best deal at renewal." Use our 5 reasons to switch car insurance.

12. Tampon tax helps women's charities

Funds from this controversial tax are to be distributed to women’s charities as Comic Relief sees fit.

13. Autumn becomes Spring

The Autumn Statement has been abolished and replaced with the Spring Statement. From 2018, the main Budget will be in the Autumn!

In summary

As predicted there were very little unexpected changes in this year's Autumn Statement and women and the over 50s were not dramatically affected in particular.  "As is typical with budgets and autumn statements, what the government gives with one hand, they sadly take from another," says Andy Smith of Totara Financial Planning. "While income tax threshold changes will benefit income earners, removing tax savings on some benefits in kind will offset that for those taking advantage.

"However, it's a welcome relief there were no dramatic changes to pension legislation," adds Andy.