The government has confirmed this year’s Autumn Statement will take place on 22 November, with the pledge to halve inflation by the end of the year likely to take centre stage.
Tom Selby, head of retirement policy at AJ Bell, comments:
“Rishi Sunak has placed tackling the cost-of-living crisis front-and-centre of his premiership after pledging to halve inflation by the end of 2023. By the time the Autumn Statement arrives in late November, we should have a pretty clear idea of whether that target – a target the government has very limited control over – will be hit. It would clearly be a huge blow to the prime minister and former chancellor, not to mention the Conservative Party at the next election, if he fails to deliver on one of his key economic pledges.
“That ever-nearing election will inevitably colour the chancellor’s Autumn Statement announcements as the government attempts to turn the tide on Sir Keir Starmer’s Labour Party, who remain well ahead in the polls. It would be no surprise to see the government use this opportunity to re-commit to the state pension triple-lock, a costly and controversial policy that is unsurprisingly particularly popular with older voters.
“At the other end of the spectrum, housing remains one of the biggest issues facing millions of younger people, so further help to those struggling to afford to buy their own home will likely also be a priority. In addition, the Autumn Statement could present an opportunity for the Tories to re-establish their credentials as a low tax political party, either by setting out an intention to reduce tax rates or ending the deep-freeze on various tax thresholds, including income tax, which has dragged millions of people into higher tax brackets.”
ISA simplification and auto-enrolment reform
“When it comes to wider pensions and savings policy, ISA simplification is on the agenda, with research conducted by AJ Bell pointing to potentially damaging confusion over how the different ISA types work. AJ Bell has called for the key features of the existing ISA landscape to be combined in a single ISA product, which should make it easier for millions of savers to make better decisions about their financial future. Such simplification would benefit savers and could be done at little cost to the Exchequer.
“The FCA and Treasury are also focused on addressing confusion around the boundary between regulated advice and guidance, and a consultation on reforms to address this is expected in the autumn – potentially as part of the Autumn Statement. Any reforms in this area will need to focus on the dual aims of boosting access to advice and improving guidance for those who are either unwilling or unable to pay for advice. It will also be critical to ensure the reforms can be implemented, without undue burden, for the benefit of customers by firms – an aim which should be helped by the establishment of an industry working group* to help shape those proposals.
“Automatic enrolment, the government’s flagship pensions policy, is also overdue an upgrade. Pensions minister Laura Trott has previously set out her intention to expand the programme so the first £1 of contributions qualifies for an employer match, as well as reducing the minimum qualifying age from 22 to 18. The government could use the Autumn Statement to provide more detail on how and when this will happen.”
