Coming in the wake of a turbulent year that has seen the UK vote to leave Europe, the US vote for a reality TV star to be president and the pound plunge to its lowest level since 1985, the Autumn Statement offered no real reason to break into song.
Forecasts for the UK economy were downbeat, with Hammond suggesting more borrowing and slower growth, but despite some of the worrying numbers now making the rounds (£220bn increase in national debt?!) there are some positives to come out of today’s speech and we’ve summarised our top five reasons to be cheerful below:
Help for home buyers
The only way that house prices are currently likely to start becoming more affordable for those looking to get on to the property ladder is if supply starts to catch up with demand. In this light, Hammond’s promise to invest £1.4 billion in 40,000 affordable new homes will be welcome news for first time buyers. Other measures include a £2.3bn housing infrastructure fund to help build 100,000 houses in areas of high demand.
Opportunities for investors
Investors still grappling with rock bottom interest rates will be happy to hear about increased government spending on local transport projects that include £1.1bn in English local transport networks, not just because infrastructure projects often produce a good return on investment but also because it helps keep the economy resilient in these uncertain times.
Opportunities for savers
A new savings bond will be launched with an interest rate of 2.2% and will be available to anyone over 16 willing to put their money away for three years. The personal tax allowance will also rise to £12,500 by the end of the current parliament, and the higher-rate tax threshold will rise to £50,000 with Hammond suggesting it will be a “boost to the incomes of low and middle earners”.
Help for renters
In a controversial move by the government, there will be a ban on letting fees which could particularly help the demographic referred to as JAMs (‘Just About Managing’) save over £300 each time they rent. Hammond has also pledged to kick-start a pilot scheme that will enable housing association tenants to buy their properties through the ‘Right to Buy’ scheme.
Investment in FinTech
There will be £500,000 a year government investment to supporting financial technology development in the UK, which means a range of innovative new banking and investment applications to help you save money could be on the horizon. The chancellor also pledged to invest in digital infrastructure such as internet fibre networks and 5G trials.
Other benefits include a continued freeze on fuel duty and a rise in the National Living Wage from £7.20 to £7.50, which means over £1,400 a year more in benefits.
The Investec Click & Invest Economist team will continue to provide regular commentary to help you make sense of the Autumn Statement over the next few days.
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