Explore the key takeaways from the UK Autumn Budget 2024, including tax changes, public spending boosts, and economic forecasts.
Chancellor Rachel Reeves has delivered Labour’s first Budget in 14 years, with significant changes to both taxation and spending that will shape the UK’s fiscal outlook and impact for investors.
Here, we break down the key points of the Autumn Budget 2024 and what it means for your financial landscape.
UK Autumn Budget 2024: Key Policy Announcements
Tax Changes
The Budget brings a series of tax rises designed to raise £40bn in additional revenue:
- Employer National Insurance: Employer contributions rise to 15p starting in April, with the earnings threshold lowered, aiming to generate £25bn annually by 2030.
- Personal Tax: The freeze on income tax and National Insurance thresholds will continue until 2028, capturing more taxpayers and potentially nudging some into higher brackets as wages grow.
- Capital Gains Tax: The lower CGT rate increases from 10p to 18p, while the higher rate rises from 20p to 24p. However, CGT on residential property remains unchanged.
Read 'What Bullion Is Capital Gains Tax Exempt?'
Inheritance Tax and Investment-Related Taxes
For investors, the changes in inheritance tax on AIM-listed shares and pensions mark significant adjustments:
- AIM Shares: A new 20p inheritance tax rate applies to shares in AIM-listed companies, previously exempt, adding complexity for those holding such assets in trusts.
- Carried Interest: The tax on “carried interest” for private equity managers will increase to 32p, with further reform anticipated.
- Business Owners: Inheritance tax relief for business assets beyond £1 million is also reduced.
Read 'Inheritance Planning with Precious Metals'
Increased Spending on Public Services
The Chancellor announced sizeable investments in core public services, such as:
- NHS: Day-to-day NHS funding will rise by £22.6bn, alongside a £3.1bn increase in the capital budget.
- Education: Schools will benefit from an additional £6.7bn investment, a 19% real-terms increase.
These commitments aim to bolster essential services, with potential long-term benefits for the UK workforce and infrastructure.
Economic and Fiscal Outlook
According to the Office for Budget Responsibility (OBR), the Budget aims to achieve a surplus by 2027-28:
- Budget Deficit and Public Debt: The deficit is forecasted to fall, with public debt expected to meet the government’s target two years ahead of schedule.
- Economic Growth: Projected economic growth of 1.1% in 2024 is a modest increase, rising to 2.0% in 2025.
- Inflation: Expected to be at 2.5% in 2024, inflation remains a key consideration for investors, particularly those holding cash and fixed-income assets.
How the UK Autumn Budget 2024 Affects Investors
This year’s Autumn Budget has several direct implications for investors:
- Increased Capital Gains Tax Rates: For those planning to sell investments, the rise in CGT rates may impact profit margins, especially for higher-rate taxpayers. Careful planning can help mitigate this.
- Changes to Inheritance Tax: Investors holding AIM-listed shares should take note of the new IHT rate, which may affect succession planning.
- Inflation and Growth: The OBR’s inflation forecast suggests a period of elevated prices, which traditionally benefits safe-haven assets like gold and other precious metals. Investors seeking stability in an inflationary environment may wish to explore adding bullion to their portfolios.
Read 'How Precious Metals Hedge Against Inflation and Economic Uncertainty'
A Strategic Approach for 2024
The Autumn Budget 2024 reflects a commitment to fiscal responsibility, with targeted tax increases and expanded public spending. For investors, the higher CGT rates, changes to IHT, and inflation forecasts highlight the need for diversified, inflation-resistant portfolios.
As always, considering a mix of traditional investments alongside safe-haven assets like precious metals can enhance resilience against fiscal changes and economic uncertainties.
Read 'Why Invest in Precious Metals?'
Here To Help
If you’re looking to strengthen your portfolio with assets that have historically held value, our team at Bleyer Bullion is here to help you navigate this evolving landscape. Get in touch with us to explore your options and take control of your financial future.
