What the Chancellor’s Autumn Statement means for UK households.
On Thursday 17 November 2022, the latest Chancellor Jeremy Hunt announced the UK’s Autumn Statement – following some of the most tumultuous pre-budget announcements in living memory.
What we now know is that the pound continues to fall and the UK is, officially, in recession with the economy set to shrink even further in 2023. The highest tax bracket has dropped from £150,000 to £125,140, and a windfall tax has been announced for UK power firms.
But how will the Autumn Statement affect the everyday Brit, and is the forecast as bleak as it looked in Kwasi Kwarteng’s mini-budget?
What the Autumn Statement said about energy prices
Though the Government will be upholding its energy price guarantee, which prevents gas and electricity companies from hitting households with unmanageable bills, the average annual bill for a typical household is now set to rise to £3,000 as of April 2023.
For the past year, the average bill has been increasing steadily, and it is currently capped at around £2,500 per year which means that many households face a significant rise in costs next spring, though there will be some further support for the lowest income households.
In response, the Chancellor has pledged to double investment in the energy efficiency of homes. This will include more sustainable building and technologies that can be fitted into new and existing homes, and as much as £6bn funnelled into the industry to help improve energy usage by 2025.
What does this mean for homes and businesses?
Though the energy price guarantee does protect both households and businesses from extortionate increases in power bills, the extra £500 per year that can be expected on our bills as of April 2023 is still a huge blow to many.
For individuals, many have already been struggling to cope with the increases and are closely monitoring their usage at home – often going without heating due to budget restrictions. This has led to many businesses offering ‘warm spaces’ in response. But now, the squeeze is hitting companies, too.
In particular, small and independent businesses that run on tighter margins and generally have fewer customers have spoken of their struggle to keep the lights on as energy prices soar. Beyond heating, lighting, and general electricity that we use at home, businesses generally require much greater output – for example running multiple computers, or kitchen equipment like fridges – which is overwhelmingly becoming an unaffordable expense.
So, even with price caps and future investments in energy-efficient buildings, the present still looks bleak for many, reflected by increasing numbers of hospitality sector insolvencies to take one sector among many that are expected to suffer this winter and through next year.
How we can help
Financial uncertainty, whether on a national or individual level, can put huge amounts of undue stress on people who are already struggling – and those who will no longer be able to afford their bills in the wake of further-increasing costs.
Great Western Credit Union offers low-cost, fair, and ethical financing options that can help you take control of your money without falling into further debt.
Our Money@Work scheme even allows members to pay back their loans at a manageable rate and to build a savings reserve which could be invaluable in difficult times, straight from their salary where they work for one of our employer partners. So the stress of putting something aside each month is removed, and you won’t need to worry about missing payments.
For more information about how we can help you overcome the cost of living crisis, get in touch today.