Chancellor of the Exchequer Rishi Sunak delivered the 2021 Autumn Budget today. He made major announcements on alcohol tax, Universal Credit and airline passenger duty (APD). But what does it all mean for you?
The Chancellor's Autumn Budget speech took place in a crowded House of Commons chamber, in contrast to the socially distanced Budget he delivered in March.
While Sunak acknowledged that the pandemic isn't over, he said his Budget would pave the way for a post-Covid 'age of optimism'.
To help you figure out exactly what difference the Autumn Budget will make to your wallet, here's a rundown of some of the biggest changes.
Sunak announced a radical overhaul of alcohol tax to loud cheers in the Commons chamber.
The new system will tax drinks based on their strength, not their category. This means stronger drinks like high-strength ciders and fortified wine will be more expensive, but some lower alcohol drinks will become cheaper.
Tax on sparkling wine - which previously had its own rate - will be reduced to bring it in line with still wine.
And duty rates on draught beer and cider will be cut by 5% in an effort to support pubs. Sunak said that this would see the cost of a pint reduced by an average of 3p.
However, none of these changes will kick in until February 2023.
Changes to the way Universal Credit works will see millions of households keeping more of their benefits.
The government has cut the 'taper' - the rate at which you lose benefits for each £1 you earn above £515 a month - from 63p to 55p.
While changes to Universal Credit would usually take place in the next tax year, the Chancellor said this taper cut would happen 'within weeks', and no later than 1 December 2021.
Sunak said this means a single mother of two, renting and working full-time for the National Living Wage, would be £1,200 a year better off.
This announcement comes after the government controversially cut £20 a week from Universal Credit when it ended a temporary uplift at the start of October against warnings this would plunge many into poverty.
The minimum wages for all ages will rise from April 2022. The 'National Living Wage' for workers aged 23 and over will increase from £8.91 to £9.50 per hour.
Minimum wages for other age ranges will increase as follows:
After this change, the National Living Wage will be in line with the Living Wage Foundation's real Living Wage of £9.50. The real Living Wage is calculated based on the cost of living, and employers can choose to pay it if they wish.
However, minimum wages for those aged under 23 still won't match this, and none of these bands match the Living Wage Foundation's 'London rate' of £10.85. It's also possible that with the rising cost of living, the real Living Wage will soon increase too.
People who work in the public sector will be allowed pay rises again, as the Chancellor has removed the temporary pay freeze he introduced earlier in the pandemic.
He says public sector workers will see 'fair and affordable pay rises' over the next three years. However, some have raised concerns that any pay increases would have to come from departmental budgets, which may not have sufficient funding to pay for them.
Long-haul flights will be more expensive from April 2023, as a new 'ultra-long-haul' band of air passenger duty (APD) is introduced.
On the other hand, domestic UK flights will get cheaper when a 50% APD cut is implemented that same month.
While the new ultra-long-haul rate was framed as an environmentally friendly measure, Sunak did not address fears that cheaper internal flights could encourage people to fly within the UK rather than using less carbon-heavy transport like trains.
Sunak confirmed already-announced plans to spend £5bn on remediating buildings with dangerous cladding, and said this will be part-funded by a new Residential Property Developer Tax (RPDT), which was first announced in February.
However, questions have been raised as to whether this will give leaseholders the help they need. The Housing, Communities and Local Government committee said earlier this year that it could cost up to £15bn to remove all flammable cladding from buildings.
A planned fuel duty rise has been cancelled amidst a backdrop of supply issues and fuel prices reaching record highs. This will be the 12th consecutive year the government has frozen these rates.
The freeze means tax on petrol and diesel will remain at 57.95p per litre until at least 2023. The government says that since the freeze began, the average driver will have saved £1,900 in tax compared with the pre-2010 duty system.
The Office for Budget Responsibility (OBR) predicts inflation will reach 4% by the end of the year. This would have two major knock-on effects.
First, your money won't go as far. If your pay doesn't rise by the same amount, in effect you've had a pay cut in real terms.
Any savings you have will also be worth less, unless your savings account itself has a rate of more than 4%. You'll struggle to find a rate like that at the moment.
A shake-up to business rates - the taxes charged on commercial properties - could see shops passing savings onto customers.
Businesses in the retail, hospitality and leisure sectors will see a 50% rates cut for the next year. It's not guaranteed, but some firms may reduce prices as a result.
Relive the Budget speech by reading our live blog of what the Chancellor announced and when.
Shadow Chancellor Rachel Reeves is now giving Labour's response to the Budget. Stick with Which? Money today for analysis of everything that's been announced, along with details of what the Chancellor didn't say in his speech, but did include in the written Budget.
The Universal Credit taper (which the Chancellor calls a 'tax on work') will be cut from 63% to 55% (reducing £1 to 63p) . He says nearly 2m families will take on average an extra £1,000 a year. Sunak says this will be introduced 'within weeks', no later than 1 December.
From next April, the 'national living wage' will increase from £8.91 to £9.50 an hour - a rise of 6.6%. This is the minimum wage for workers aged 23 and over. For a full-time worker this is a pay rise worth £1,000.
People working in the public sector will be allowed pay rises once again from April 2022. This marks the end of a 'pause' on public sector pay that Sunak imposed last November.
Sunak says drivers will save a total of £1,900 thanks to 12 consecutive years of frozen rates.
The Chancellor announces a 'radical' overhaul of alcohol duty, simplifying the system. There will now be six rates, instead of 15. Rates will be based on the strength of a drink, ending the 'era of cheap, high-strength drinks' that can harm public health.
The 'irrational' 28% duty for sparkling wines will be removed and a new, lower rate of duty on draught beer and cider will be introduced to support pubs.
And the planned increase in duty on spirits like Scotch Whisky, wine, cider and beer, will be cancelled from midnight tonight.
Sunak announces changes that he says will make the business rates system fairer and timelier, with valuations at more frequent three-year intervals.
From 2023, every business will be able to make property improvements and for 12 months, pay no extra rates.
Next year's planned increase in the multiplier will also be cancelled.
Plus businesses in the retail and hospitality sector will get a 50% business rate cut for a year.
From April 2023, internal UK flights will be subject to a new, lower rate of APD.
The Chancellor has pledged £1.8bn to build new homes in England. The homes will be built on brownfield land - areas that were previously developed but not currently in use.
This new scheme shares a lot with the Starter Homes Initiative, which was announced in 2015. The government cancelled Starter Homes in 2020 before a single home was built.
Housebuilders will have to pay a levy to raise £2bn for removing unsafe cladding from buildings. This tax was first announced in February this year, and it falls short of the £5bn the government has already pledged to help leaseholders trapped in dangerous flats.
It's also much smaller than the £15bn the Housing, Communities and Local Government Committee estimated it could cost to remove all dangerous cladding earlier this year.
OBR expects the economy to return to pre-Covid level at the turn of the year.
Sunak says the OBR predicts inflation will rise to 4% thanks to suppy chain issues and rising energy costs.
The Chancellor acknowledges the pandemic isn't over but says this Budget paves the way for a post-Covid 'age of optimism'.
Rishi Sunak is speaking. The Autumn Budget is underway.
Prime Minister Boris Johnson and Ed Miliband, standing in for the Leader of the Opposition Sir Keir Starmer, are facing off at Prime Minister's Questions. But the day's political peak will come as soon as PMQs is over, when Chancellor Rishi Sunak steps up to the dispatch box.
Traditionally, Prime Ministers remain tight-lipped about the Budget's contents in the PMQs that take place prior to the Budget, but we'll post any hints Boris Johnson drops if he breaks with tradition.
This story was first published on 24 September 2021, shortly after the Chancellor announced the date for the Autumn Budget. It was last updated on 27 October 2021 with live coverage of the Budget speech.