The main rate of National Insurance is to be cut from January 2024, boosting incomes for both employees and the self-employed. Chancellor Jeremy Hunt’s Autumn Statement announces National Insurance payments will be cut from 12% to 10% for employees and from 9% to 8% for the self-employed. As part of a £20 billion tax cut, the national insurance cuts will take effect from 6 January and come after inflation dropped dramatically this month to 4.6% compared to 10.7% last November.
Richard Donnell head of research and insight at Zoopla, said the housing market is an extension of the wider economy. He said: “Putting more money into take-home pay will help improve housing affordability and support confidence into 2024.”
The Mortgage Guarantee Scheme has been extended to June 2025 for residential first-time buyers and homemovers with small deposits and can be used on homes up to the value of £600,000 but not for new build.
State Pension payments will increase by 8.5%, in line with average earnings and the National Living Wage is to increase from £10.42 to £11.44 an hour, both from 6 April 2024.
The headline inflation is forecast to fall to 2.8% by the end of 2024 and to the Bank of England’s 2% target rate in 2025. The independent Office for Budget Responsibility (OBR) expects the economy to grow by 0.6% this year and 0.7% next year, rising to 1.4% in 2025, then 1.9% in 2026, 2% in 2027 and 1.7% in 2028. The borrowing forecast is to fall from 4.5% of GDP in 2023/24 to 3% in 2024/25, 2.7% on 2025/26, 2.3% in 2026/27, 1.6% in 2027/28 and 1.1% in 2028/29.