Budget Forecast vs. Reality: What Your Payslip Has to Say

30 October 2024

Connor Banks

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The UK’s Autumn Budget announcement has wrapped up, and as the dust settles, we’re left to sift through what was forecasted, what we actually got, and what it means for our payslips (yes, they’re trying to squeeze a bit more out of them). Here, we’ll highlight the major takeaways and surprises, along with some advice for when you next check your wage slip and think, “Where did that go?”.

Forecast vs. Reality

Before the Budget dropped, the expectation was that we’d see:

An uptick in the National Living Wage – which did happen, hitting £12.21 per hour.
Stable income tax rates – indeed, no changes there.
Potential tweaks to inheritance tax, which, as predicted, now include taxes on pension pots starting in 2027.
Hopes for fuel duty stability – a wish that’s still on the fence.

What We Got:

The Budget’s big headline for most folks? The 6.7% minimum wage hike. Not only will this mean a little extra for workers, but it also comes with some expected price rises in retail and hospitality (where payrolls are heavy). A quick glance at your payslip might show the new rates sooner than later. Taxes like VAT and income tax stayed the same, but the freeze on income tax thresholds and potential tweaks to capital gains tax means it’s still worth watching your deductions closely.

Key Takeaways for Employees

Expect slight increases in take-home for minimum wage workers, but don’t bank on much more wiggle room in disposable income, especially with energy prices and potential fuel duty hikes looming. For everyone else, the lack of change in thresholds (a freeze on the personal allowance) means inflation will continue to nibble at real income. Looking forward, this is one Budget where the big-ticket changes may just trickle down rather than make waves, though future adjustments on savings taxes could impact those with pension plans or capital gains in the works.

So, when you see that wage slip, a small jump in your hourly rate might feel like a win – just remember the Budget giveth, and, in some ways, the Budget taketh away. Keep an eye out for any savings or pension-related tweaks in future announcements, and make sure you’re still set for any tax adjustments down the line.

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Budget Forecast vs. Reality: What Your Payslip Has to Say

Connor Banks
Oct 30, 2024
2 min read

The UK’s Autumn Budget announcement has wrapped up, and as the dust settles, we’re left to sift through what was forecasted, what we actually got, and what it means for our payslips (yes, they’re trying to squeeze a bit more out of them). Here, we’ll highlight the major takeaways and surprises, along with some advice for when you next check your wage slip and think, “Where did that go?”.

Forecast vs. Reality

Before the Budget dropped, the expectation was that we’d see:

An uptick in the National Living Wage – which did happen, hitting £12.21 per hour.
Stable income tax rates – indeed, no changes there.
Potential tweaks to inheritance tax, which, as predicted, now include taxes on pension pots starting in 2027.
Hopes for fuel duty stability – a wish that’s still on the fence.

What We Got:

The Budget’s big headline for most folks? The 6.7% minimum wage hike. Not only will this mean a little extra for workers, but it also comes with some expected price rises in retail and hospitality (where payrolls are heavy). A quick glance at your payslip might show the new rates sooner than later. Taxes like VAT and income tax stayed the same, but the freeze on income tax thresholds and potential tweaks to capital gains tax means it’s still worth watching your deductions closely.

Key Takeaways for Employees

Expect slight increases in take-home for minimum wage workers, but don’t bank on much more wiggle room in disposable income, especially with energy prices and potential fuel duty hikes looming. For everyone else, the lack of change in thresholds (a freeze on the personal allowance) means inflation will continue to nibble at real income. Looking forward, this is one Budget where the big-ticket changes may just trickle down rather than make waves, though future adjustments on savings taxes could impact those with pension plans or capital gains in the works.

So, when you see that wage slip, a small jump in your hourly rate might feel like a win – just remember the Budget giveth, and, in some ways, the Budget taketh away. Keep an eye out for any savings or pension-related tweaks in future announcements, and make sure you’re still set for any tax adjustments down the line.