Chancellor Jeremy Hunt is expected to announce an increase to the National Living Wage (NLW) this week. The rise is just one measure that could feature in the chancellor’s autumn statement on Thursday (November 17), in which he will outline how he intends to plug a £60bn gap in the UK’s finances.
According to news first reported in The Times, the NLW is set to rise from £9.50 to an estimated £10.40, which would benefit around 2.5 million people. Additional key moves being considered, according to Sky News, are:
• Payments of £650 for those on means-tested benefits such as Universal Credit, £150 for disability benefit recipients, and £300 for pensioner households
• Cost of living payments for eight million households worth up to £1,100
• Freezing of thresholds for income tax, national insurance, VAT, inheritance tax and pensions savings
• Removing the requirement for local authorities to hold a referendum before increasing council tax by more than 2.99%, allowing them to raise more money
The measures form part of plans to raise taxes by £22bn and cut spending by £33bn. The government said that low-income households will be prioritised, with middle-income and wealthy households bearing the brunt of tax increases.
There have also been hints that the autumn statement could include plans to increase benefits and the state pension in line with the inflation rate of 10.1%, which will cost around £11bn.
The statement is expected to focus mainly around soaring energy costs. The Energy Price Guarantee means typical households will receive bills of approximately £2,500 a year, but this could rise to up to £3,100 next year.
The Chancellor said on Sunday with Laura Kuenssberg over the weekend: “We will introduce a plan that will see us through the very choppy waters that we’re in economically. But we’ll make sure that we protect the most vulnerable, and in particular deal with the single biggest worry for people on lower-incomes, which is the rising cost of their weekly shop and rising energy prices.
“Economically that makes sense too, because inflation is much higher than it should be, and that is destabilising people’s family finances as well as being very bad for businesses in the economy.”