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Autumn Budget and Spending Review 2021 – what you need to know

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If you’re wondering how your household finances are going to be affected over the coming months, find out what the government has announced in its Autumn Budget 2021. 

Universal Credit taper rate changed

If you’re getting Universal Credit and you’re working, you will be allowed to keep an extra 8p for every pound you earn after tax, NI and pension contributions are taken off as the rate at which your Universal Credit reduces falls from 63p to 55p. This is known as the taper rate. 

You’ll be able to earn an extra £500 a year before the taper rate is applied if you’re eligible to get a work allowance. 

These changes are expected to be in place by no later than 1 December 2021 so you should expect to see a change in income in your next Universal Credit payment after this date. 

Find out more about work allowances and taper rates at GOV.UK (Opens in a new window)

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National Living Wage increased

From 1 April 2022, the National Living Wage for adults aged 23 and over will increase from £8.91 per hour to £9.50 per hour. 

The National Minimum Wage for workers under the age of 23 will also increase from 1 April 2022 by the following amounts: 

  • for 21- and 22-year-olds, from £8.36 to £9.18 per hour 
  • for 18- to 20-year-olds, from £6.56 to £6.83 per hour 
  • for 16- and 17-year-olds, from £4.62 to £4.81 per hour 
  • for apprentices, from £4.30 to £4.81 per hour.

Alcohol duty streamlined

The way tax is charged on the sale of alcohol will also change so that drinks containing more alcohol will have a higher alcohol duty than drinks containing less alcohol. 

The rate of tax on beer, wine, cider and spirits will be frozen for 2022-23. 

There will be incentives to go out again to drink in pubs and bars with 3p off a draught pint.

Fuel duty frozen

Tax on fuel (such as car petrol) will continue to be frozen for 2022-23.

Air Passenger Duty for domestic flights reduced

From April 2023, the rate of Air Passenger Duty (APD) paid by consumers on domestic flights (flights between airports in England, Wales, Scotland and Northern Ireland) will be cut 50%. 

For international flights, a new rate of APD will be introduced for flights further than 5,500 miles (for example, to Australia). 

This means the cost of domestic flights might become cheaper, while the cost of international flights could become more expensive.

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