Ahead of the full budget summary release from Xeinadin, we’ve highlighted the key takeaways from today’s address by the Chancellor.
Chancellor of the Exchequer Rachel Reeves unveiled the 2024 UK Autumn Budget, introducing major fiscal reforms intended to bolster the National Health Service (NHS), raise wages for low-income earners, and increase employer tax obligations. Reeves emphasised that the Budget reflects Labour’s commitment to alleviating cost-of-living challenges, addressing public health concerns, and reducing the budget deficit – all without compromising essential social services. Here’s a closer look at the main announcements and their implications for individuals and businesses.
1. National Insurance Contribution (NIC) increases for employers
The 2024 budget introduces a significant rise in National Insurance Contributions (NICs) for employers, projected to generate around £25 billion annually. From April 2025, the employer NIC rate will increase by 1.2 percentage points to 15%. In addition, the starting point for when this is payable has been lowered from £9,100 to £5,000.
This change places a significant fiscal burden on to large employers, without raising individual income taxes.
2. Minimum wage increase
In response to the rising cost of living, the Chancellor announced a 6.7% increase in the minimum wage, raising it to £12.21 per hour for workers aged 23 and over from April 2025. This measure is designed to provide a financial boost to lower-income workers. The government estimates that this increase will positively impact millions of households.
Additionally, the minimum wage for younger workers, including those aged 16 to 17, will also see an 18% increase, recognising the financial struggles faced by younger generations entering the workforce.
3. Boost to NHS funding
The NHS remains a priority for the government as it tackles service backlogs and operational challenges. Today’s budget includes a £1.5 billion funding increase for 2025, aimed primarily at reducing wait times and improving patient care. Reeves described the NHS investment as “a commitment to quality and access,” pledging that this funding will make healthcare more accessible for everyone in the UK, while helping to “turn around” NHS performance after years of underfunding.
4. Public debt reduction strategy
The Chancellor emphasised that given income tax rates will not rise, the reduction in national debt needs to come from the business sector and fiscal adjustments. Via these measures, Reeves aims to create a more balanced budget without directly impacting individual taxpayers.
5. Key changes to social services and infrastructure
In addition to healthcare, the budget includes targeted investments in public services and infrastructure. This includes funds to improve transportation networks and modernise schools and hospitals, which Reeves stated are crucial for supporting the UK’s long-term growth. These investments are part of Labour’s broader vision to “restore Britain’s foundations”.
6. Freeze on fuel duty
To mitigate the impact of fuel price rises on households and businesses, the Chancellor confirmed a freeze on fuel duty for the coming year. This is intended to provide immediate financial relief amidst inflationary pressures on energy costs.
7. Support for green initiatives
To further the UK’s commitment to net-zero goals, the budget included new funding and incentives for renewable energy projects and green technologies, particularly in relation to the Carbon Capture and Storage (CCS) technology development. This funding aims to boost innovation and jobs within the green economy.
8. Changes to Capital Gains Tax (CGT)
The Chancellor announced that the tax will rise to 18% for lower-rate taxpayers and 24% for higher-rate taxpayers. However, rates for residential property gains will stay unchanged at 18% and 24%.
Despite these adjustments, the UK will continue to maintain “the lowest capital gains tax rate of any European G7 economy,” Reeves noted.
What the 2024 Budget means for the public
For UK households, the Budget aims to offer some immediate relief through wage increases and improved access to healthcare, while businesses will bear the brunt of the revenue-raising measures. The minimum wage hike will particularly benefit low-income workers, while public investments in health and infrastructure promise longer-term improvements in service accessibility and quality. However, for the business sector, the tax increases present new financial pressures, which could impact business investment and potential recruitment as companies adjust to the new fiscal landscape.
Summary
Today’s Autumn Budget reflects the government’s dual focus on addressing immediate public needs while implementing a longer-term plan for fiscal stability. With its substantial investments in the NHS, targeted support for low-income workers, and a clear strategy for deficit reduction, the Budget highlights Labour’s approach to economic management in a challenging financial environment. As the country emerges from inflationary pressures and seeks to stabilise its finances, the 2024 Budget sets a cautious but ambitious path forward for the UK economy.
The complete Xeinadin Budget summary will be available for download later today. Please check back soon to access it.
