Looking ahead in 2024 - What you need to know
January 2024
Looking ahead in 2024 - What you need to know
January 2023
There’s no question that 2023 was a tough year – ongoing high inflation and higher interest rates created challenges for many families up and down the country. However, there are some reasons to be hopeful for the year ahead. Consumer Prices Index (CPI) inflation has now more than halved from a peak of over 11% last autumn to 4.6% in October 20231, and in his recent Autumn Statement, Jeremy Hunt, the Chancellor of Exchequer, announced a series of measures designed to help savers, homebuyers and renters.
So how could these changes impact you in the coming year?
New rules make it easier to move money between ISAs
The Chancellor announced some important measures for savers in the Autumn Statement. From April 2024, it will be possible for adults to open multiple ISAs with different providers in the same tax year. Savers can split their annual ISA allowance between different product types (e.g. easy access and fixed rate ISAs) and also different providers. One of the changes announced was allowing partial transfers between ISA providers, which will give ISA savers more flexibility and control. You no longer need to reapply for an ISA each year and the age limit to hold an ISA has increased to 18 for all adult ISAs.
As a Society, we're reviewing these changes closely in respect of how we'll be able to support our members.
National Insurance cut will mean workers will take home slightly more money in their wages
From January 2024, the main rate of employee National Insurance will fall from 12% to 10%. That’s a tax cut for 29 million people2 which the government says will save someone earning £35,400 a year an average of £450 in tax in 2024-25. It means money straight back into earners’ pockets, which some may want to consider putting aside into a savings account.
National Living Wage rise will ease pressure on households
Although inflation is coming down, the cost of living is still much higher than it was before the pandemic. But, from April 2024 the National Living Wage will increase to £11.44 from its current rate of £10.42, while the threshold for the wage will be extended to include those aged 21 and over. The pay increase will help ease pressure on working households, especially if the current downward trend in inflation continues.
Unfreezing Local Housing Allowance will help low-income renters
Local Housing Allowance (LHA) Rates are used to calculate the amount of housing benefit given to tenants renting from private landlords. The formula used to calculate LHA has been frozen since 2020, meaning that many people have seen these benefits left behind by higher inflation.
However, in the Autumn Statement, the Chancellor announced plans to unfreeze the allowance. The decision could provide assistance to 1.6 million low-income renters struggling to pay higher rents, giving them an average of £8003 in extra support next year.
Mortgage Guarantee Scheme to be extended
Jeremy Hunt also announced his intention to extend the Mortgage Guarantee Scheme. The scheme supports first-time buyers, buy a home with a 5% deposit as the government offers lenders the financial guarantees they need to provide mortgages that cover the other 95%, subject to the usual affordability checks, on a house worth up to £600,000.
Originally intended to expire on 31 December, the Scheme will now be extended to June 20254.
The Mortgage Guarantee Scheme was introduced during the pandemic to help new homebuyers purchase properties with a high LTV mortgage. The extension of the scheme to 2025 will help more people get a high LTV mortgage and thus the opportunity to get onto the housing ladder and out of rental or family accommodation.
All these measures will hopefully provide some relief to homebuyers, homeowners, and savers through the months ahead. There could be more to come in the next Spring Budget, but for other ways to get saving and make your money go further, view our Knowledge Centre for our latest tips and guidance.
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There’s no question that 2023 was a tough year – ongoing high inflation and higher interest rates created challenges for many families up and down the country. However, there are some reasons to be hopeful for the year ahead. Consumer Prices Index (CPI) inflation has now more than halved from a peak of over 11% last autumn to 4.6% in October 20231, and in his recent Autumn Statement, Jeremy Hunt, the Chancellor of Exchequer, announced a series of measures designed to help savers, homebuyers and renters.
So how could these changes impact you in the coming year?
New rules make it easier to move money between ISAs
The Chancellor announced some important measures for savers in the Autumn Statement. From April 2024, it will be possible for adults to open multiple ISAs with different providers in the same tax year. Savers can split their annual ISA allowance between different product types (e.g. easy access and fixed rate ISAs) and also different providers. One of the changes announced was allowing partial transfers between ISA providers, which will give ISA savers more flexibility and control. You no longer need to reapply for an ISA each year and the age limit to hold an ISA has increased to 18 for all adult ISAs.
As a Society, we're reviewing these changes closely in respect of how we will be able to support our members.
National Insurance cut will mean workers will take home slightly more money in their wages
From January 2024, the main rate of employee National Insurance will fall from 12% to 10%. That’s a tax cut for 29 million people2 which the government says will save someone earning £35,400 a year an average of £450 in tax in 2024-25. It means money straight back into earners’ pockets, which some may want to consider putting aside into a savings account.
National Living Wage rise will ease pressure on households
Although inflation is coming down, the cost of living is still much higher than it was before the pandemic. But, from April 2024 the National Living Wage will increase to £11.44 from its current rate of £10.42, while the threshold for the wage will be extended to include those aged 21 and over. The pay increase will help ease pressure on working households, especially if the current downward trend in inflation continues.
Unfreezing Local Housing Allowance will help low-income renters
Local Housing Allowance (LHA) Rates are used to calculate the amount of housing benefit given to tenants renting from private landlords. The formula used to calculate LHA has been frozen since 2020, meaning that many people have seen these benefits left behind by higher inflation.
However, in the Autumn Statement, the Chancellor announced plans to unfreeze the allowance. The decision could provide assistance to 1.6 million low-income renters struggling to pay higher rents, giving them an average of £8003 in extra support next year.
Mortgage Guarantee Scheme to be extended
Jeremy Hunt also announced his intention to extend the Mortgage Guarantee Scheme. The scheme supports first-time buyers, buy a home with a 5% deposit as the government offers lenders the financial guarantees they need to provide mortgages that cover the other 95%, subject to the usual affordability checks, on a house worth up to £600,000.
Orginally intended to expire on 31 December, the Scheme will now be extended to June 20254.
The Mortgage Guarantee Scheme was introduced during the pandemic to help new homebuyers purchase properties with a high LTV mortgage. The extension of the scheme to 2025 will help more people get a high LTV mortgage and thus the opportunity to get onto the housing ladder and out of rental or family accommodation.
All these measures will hopefully provide some relief to homebuyers, homeowners, and savers through the months ahead. There could be more to come in the next Spring Budget, but for other ways to get saving and make your money go further, view our Knowledge Centre for our latest tips and guidance.
