Autumn Statement: What does it mean for consumers?

Chancellor George Osborne unveiled his latest Autumn Statement yesterday (December 5th) and stated the economy is "bouncing back" after a to…

Chancellor George Osborne unveiled his latest Autumn Statement yesterday (December 5th) and stated the economy is "bouncing back" after a tough few years.

A number of new policies were announced that are designed to ease the pressure on households, who are likely to find the next few weeks tough as they try to regulate their Christmas spending. 

However, what will be the real impact for the average UK adult?

Young people

National Insurance contributions (NICs) are going to be abolished for under-21s. This means youngsters in part or full-time employment can look forward to a greater take-home pay packet.

Expected to cost the Treasury £465 million in 2015-16, the move has been described as "great news" by director of communication for Saga Paul Green. "We have been campaigning for a cut in taxes on employing young people and the long-term unemployed for many years and we are delighted the government have listened and acted," he added.

However, Trades Union Congress general secretary Frances O'Grady thinks youngsters have been dealt a "raw deal" as there is no guarantee of new jobs. 

Fuel prices

One of the main expenses for any working family, the news that fuel duty has been frozen until May 2015 will lift some of the pressure on hard-pressed consumers. It means the tax will remain at 57.95 pence per litre – the level it has been at since March 2011.

With a recent survey by the RAC Foundation finding that 16.7 million workers across England and Wales either drive to the office or get a lift, it's clear this move will make a huge difference.

Welfare

There will be a complete cap on welfare spending from 2015 and so consumers could see the amount of money they are given reduced significantly. Speaking about the move, Mr Osborne stated: "The principle is clear. The government has a responsibility to taxpayers to control their spending on welfare and parliament has a responsibility to the country to hold the government to account for it."

Those who rely on their benefits will have to put a stringent balance in place, as it remains the best way to make sure they control their spending. 

Pensions

The state pension age is going to be increased to 68 sooner than expected. While the entitlement was already rising to 66 by 2020 and 67 by 2028, the date for the next stage has been brought forward to the mid-2030s.

It means consumers in their 40s will have to work for an extra year, and underlines the importance of effective pension planning from an early age. 

Savers

Robin Fieth, chief executive of the Building Societies Association, admitted savers are going to "feel the pinch" for a little bit longer as a result of the Autumn Statement. This is because a range of measures have been introduced to tackle the cost of living and interest rates are set to stay at a historic low for much longer than originally anticipated. 

"The chancellor should listen to calls to improve this situation by making some simple changes to ISA rules to allow savers to use up their annual allowance in cash savings," he added.

By Amy White

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