State Pension Increase
Pensioners are set to receive an 8.5% boost to their State Pension, marking the second consecutive record-high increase, courtesy of the triple lock. This rule dictates that the State Pension should rise by the highest of three factors: average wage growth, inflation, or 2.5%. This upcoming April will see those on the full new State Pension receiving an additional £17.35 weekly, totalling £221.20, translating to an annual increase of approximately £900.
National Insurance Reductions
Significant reductions in National Insurance (NI) have been announced. The main employee NI rate will decrease from 12% to 10%, affecting earnings between £12,570 and £50,270. Effective from January 6, 2024, this change is fast-tracked for the 2024 pay period. Additionally, self-employed individuals will witness the abolition of Class 2 NI contributions in April 2024, and Class 4 NI contributions will drop from 9% to 8%.
‘Pot for Life’ Pension
The Chancellor proposes a consultation on providing pension savers with a ‘pot for life.’ This concept would allow individuals to opt for their employer to contribute to an existing pension pot, avoiding the need to open a new one with each job change. The aim is to prevent the loss of pension funds over a lifetime, addressing the current issue of almost £27 billion in lost pensions.
Multiple ISAs of the Same Type
Starting April 2024, individuals can open multiple ISAs of the same type, a departure from the previous restriction of one per type. This change enables flexibility, particularly for those wanting to capitalise on better rates offered by different providers within the same tax year.
National Living Wage Increase
The National Living Wage is set to rise to £11.44 per hour from April next year, now extending to 21- and 22-year-olds for the first time. This wage hike not only aids individuals facing inflation challenges but could also bring some above the £10,000 threshold for auto-enrolment, automatically initiating a pension plan funded by their employer and simplifying their savings for the future.
