The Autumn Budget 2024: what it might mean for you

On 30 October 2024, Chancellor Rachel Reeves opened up the infamous red box to deliver Labour’s first Budget since the party came to power.

There’s no doubt it was a widely anticipated Budget and one that people weren’t particularly looking forward to. Research that we’ve carried out found that 70% of people were feeling worried or anxious over what the government would announce.

The good news is, now that it’s over and done with, we know more about what to expect. So let’s take a look at the major talking points and what they might mean for you and your money.

What tax changes were announced in the Budget?

Taxes are one of life’s few certainties, and this year’s Budget brought some noteworthy changes – especially around Inheritance Tax.

Inheritance Tax is a tax applied to your estate if it’s worth more than a certain amount when you die.

• It’s typically charged at a rate of 40%.
• It applies to estates valued over £325,000.
• There’s an extra £175,000 allowance that could be available if your main home is passed on to a direct descendant.
• Spouses and civil partners can pass on unused allowance to each other when they die.

The current thresholds were set to stay the same until 2028, but Reeves confirmed she would extend this freeze to 2030, making it likely that more estates will pay Inheritance Tax in the future.

But it doesn’t stop there.Reeves also announced that from April 2027, pensions will be included as part of your estate when you die – meaning they’ll become subject to inheritance tax too.

Under the current rules, pensions aren’t usually taxed in this way, so this is a huge change for retirement planning – especially as people tend to access their pensions last, knowing they won’t be subject to Inheritance Tax.

We don’t have all the details on this change yet. And with three years until it comes into force, the government have given themselves plenty of time to finalise everything.

If you’re wondering about how inheritance tax might affect you, one of our expert financial advisers could help. We’ll work with you to help you navigate the complicated rules and regulations in a way that you can understand and trust.

Capital Gains Tax to increase

The other tax area to see significant change was Capital Gains Tax (CGT) – though this one was expected by many.

This is a tax you pay when you sell or give away an asset, like property (other than your main home), investments, or other valuables. Each year, you get a £3,000 Capital Gains Tax allowance – anything above that amount gets taxed.

• Reeves announced the amount paid for basic-rate taxpayers will rise from 10% to 18%.
• For higher-rate taxpayers, Capital Gains Tax will increase from 20% to 24%.
• The increase matches the existing rates for property which will stay the same. It means all of the rates are now aligned with each other.

With the potential for higher tax bills on the cards for investors, it’s even more important to make use of any tax-efficient allowances available. Our financial advisers could help you make the most of these options.

What about your savings?

It was all very quiet on the savings side of things. While there was talk of potential changes to Individual Savings Accounts (ISAs), thankfully the Chancellor left them untouched – and it was a relief when she confirmed the annual ISA allowance would stay the same until 2030.

This is good news because having the opportunity to build your money in tax-free accounts will become even more important after some of the other announcements made.

Each tax year you can save:

• Up to £20,000 in personal ISAs.
• Up to £9,000 on behalf of a child.

We have a wide range of Cash ISAs, with options ranging from easy access to fixed term. If you’re thinking even longer-term, you could also have a look at a Stocks and Shares ISA. And if you’re saving for your first home or retirement, we have our Lifetime ISA (LISA) too.

What happens with pensions?

Aside from the change to include pensions as part of Inheritance Tax, the only other announcement of note was on the state pension.

Reeves confirmed the pension triple lock will remain, which means the state pension will continue to increase in line with inflation, average wages, or 2.5% every year. This means that in April the state pension will go up by 4.1% (in line with average earnings)

• The full, new flat-rate state pension (for those who reached state pension age after April 2016) is expected to increase to £230.30 a week.
• The full, old basic state pension (for those who reached state pension age before April 2016) is expected to go up to £176.45 a week.

Despite a few rumours, pleasingly there were no changes to how much you can withdraw from your pension tax-free – meaning a pension remains a really important tool for saving towards your retirement.

How were home buyers affected?

Charlotte Harrison, CEO – Home Financing, breaks down some of the key housing announcements and what they could mean if you’re planning to buy a home.

One of the biggest changes for homeowners is an immediate increase in stamp duty on second homes, rising from 3% to 5%. This applies to anyone buying their second home, including buy-to-let properties and companies buying residential properties.

As for stamp duty in general, the previous government temporarily raised the threshold for paying stamp duty, reducing fees for many home-buyers. There are no plans to extend this, meaning that from 31 March 2025:

• Buyers will pay stamp duty on properties worth over £125,000 (decreasing from £250,000)
• For first-time buyers the threshold will drop from £425,000 to £300,000.

These changes could increase the cost of moving for many, so if you’re looking to buy a new home, you might want to act before the new stamp duty thresholds take effect in March. We offer a range of mortgage options that could be right for you.

Labour also announced they’re working to make their ‘Mortgage Guarantee Scheme’ permanent. This initiative encourages lenders to offer more access to low-deposit mortgages for first-time buyers – making it easier for them to get on the property ladder.

This is something we’re passionate about here at Skipton, and we’re already in the process of trying to help as many people as possible buy their first home – visit our first-time buyers page for more information.

Other key points you might want to know about

• The Chancellor announced there won’t be an additional freeze on the income tax threshold. This means from 2028/29 they’ll change in line with inflation. It should bring an end to the increase in people paying more tax at higher rates.
• Starting in April 2025, employer National Insurance Contributions will rise from 13.8% to 15%. And the threshold for when employers will start to pay this tax will decrease from £9,100 to £5,000. It doesn’t immediately impact your take-home pay, but businesses may respond by cutting back on hiring or offer smaller pay rises to offset these costs.
• The National Minimum Wage will receive a 6.7% boost to try and help workers across the country keep up with the rising cost of living.

For many, this Autumn Budget presents both opportunities and challenges. While some measures will offer immediate financial benefits, others may represent potential long-term planning hurdles. But that’s where we could help.

Financial advice is harder to find on the high street these days – with many organisations needing you to have over £100,000 to invest. The great news is we’re different. You can speak to one of our financial advisers if you have at least £20,000 available to invest or £50,000 already in pensions and savings combined. We could also help you out if you’re able to invest £500 per month.

Find out if financial advice might be right for you and how to book your FREE initial consultation.