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How does the 2014 Autumn Statement affect you?

Autumn Statement 2014

The Chancellor delivered his Autumn Statement to Parliament yesterday. So what were the key announcements for consumers and how will it affect our personal finances?

The Autumn Statement announced measures to tackle many of the issues that we know from our insight are consistently important for consumers.

Overall, consumers are feeling more positive about the state of the economy and four in 10 expect the economy to improve in the next year.

But attitudes towards people’s own household finances continue to lag behind economic optimism and three in 10 people remain in some sort of financial distress.

Moving home costs

Changes to stamp duty will remove the big leaps that consumers face between price brackets. Under the current rules, stamp duty is not tiered, which means that buyers are hit by big jumps in their tax bill when they tip into a new band. But under the new system, the rates will only apply to the portion of the selling price that falls into the tax band, instead of the whole value of the property.

Over half of us are worried about housing costs, which reflects the fact that consumers spend, on average, more than £1 in every £5 on this area. Given this context, the Chancellor’s big announcement on stamp duty reform is likely to be welcome news for many.

We’ve also been asked by the Chancellor to work with the Council of Mortgage Lenders to improve mortgage fee transparency and make it easier to choose the best mortgage deals.

We’re delighted that the Government has asked us to work on this issue. It’s a win for the 45,000 people who signed our petition and 3,000 who emailed their MPs.

Switching and saving

The Treasury estimates that 150,000 people lose out on tax advantages each year when their partner dies. Taxes on inheriting a pension pot will be extended to annuities and spouses will now be able to inherit a partner’s ISA tax free.

This is an important change given that four in 10 people do not have the recommended level of savings, and a quarter have no savings at all.

Fuel, roads and infrastructure

Over the last year, seven in 10 have consistently been worried about the price of fuel. The Chancellor extended the fuel duty freeze and – as advocated by Which? – the Government will install electronic signs showing fuel price comparisons on the M5.

Finally, new investment in roads, trains and flood defences was also announced in the run up to the Statement. The National Infrastructure Plan confirmed that investment over the next seven years will rise by a further £69bn, with most of this paid for through consumers’ bills. We will continue to press for greater scrutiny of this funding to ensure it is delivered at the lowest possible cost.

What were your highlights from the 2014 Autumn Statement? What key changes will make the biggest impact on your budgets?

How will the Autumn Statement affect you?

I don't think it will affect me (45%, 127 Votes)

It will have a positive impact on my finances (30%, 85 Votes)

It will have a negative impact on my finances (25%, 71 Votes)

Total Voters: 283

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Whats stamp duty got to do with it,if enough houses were being built that would make a greater impact on the prices of houses for all.these measures are going to push up the prices even more .we know its all about suppy n demand.I just think in the medium term when interest rates do start to rise there will be a lot of people that are going to struggle .If the polititians had lived up to their promises n built more houses over the last decade,the stupidily high cost of buying them now would never have happened.So stamp duty relief is just a grain of sugar in a big mug of murky coffee

Politicians can only help create the economic climate in which industry (including house building) can thrive, thus helping to improve employment opportunities. Unfortunately, developers are more interested in big profits than simply building houses, so many of them have been land banking during recessionary times – they will build and sell when the market is right for them, which will not result in cheap housing – that will never happen. The change in the way stamp duty is calculated will make the tax much fairer than it has been in the past, by reducing the hike in tax paid at specific thresholds. It will be more evenly calculated and help a lot of buyers, but at the same time will increase the amount collected at the higher end of the market.

Mr D Cummings – I quite agree – In fact successive governments have failed to build enough homes for many decades – as a consequence, this has caused property prices to rocket and outstrip peoples ability to keep up with the inflated prices. Most Young people today will find it impossible to ever own their own homes unless they are in the position where their parents can provide a substantial deposit.

This is a regional thing. In some parts of the country there are plenty of houses at affordable prices. The problem is the distribution of work. So long as everybody has to pile into London & the South East, where getting less property for more money is reaching ludicrous levels, hardship will persist. I would prefer to see the government taking bigger steps to shift work nearer the population than pressing housebuilders to throw up flats on every square inch of land and landlords to convert every terraced house into apartments. I agree with AQ on the benefits of the new Stamp Duty Land Tax scales, and to the extent that the Chancellor didn’t seek any correction of the distortion in L&SE by introducing differential regional bands then there might be some self-propelled movement of London employers to provincial locations if they cannot attract the workers they need.

AllanCMc says:
4 December 2014

For far too long politicians have been driving home ownership as a realistic and achievable aspiration for all as a guise to propping up a flagging ecconomy, now look at the state of the housing market, over priced, poor quality homes flung up on poor quality sites.
Pushing the home ownership is just another way of keeping people in debt and under control it’s a ” Thatcherism ” savers being stung by low interest rates to keep debt ( mortgage ) interest rates low is crooked unjust and unfair and enables politicians to try and control the inevitable housing bubble and prevent an inevitable negative equity situation arising again too soon but it will happen it has to.

The prices reflect what the majority of people can borrow, not what they can afford. The more they are allowed to borrow, the more they bid to compete with each other. Prices rise higher, and people have to stretch themselves further and further. Auctioneers and estate agents exhort people to bid a bit more or regret it forever after. Lenders are forced to offer more and more unreasonable income multiples.

As far as moving (exchanging one residence with another) is concerned, the legal professions (solicitors, accountants, estate agents, independent financial advisors) have failed the public by ratcheting up the uncertainties and stress involved more every year.

Asabus says:
4 December 2014

My major concern about mortgages on the whole is simply this:

A hard working person pays without defaulting for 24 years.

There is only one year to go and they suddenly have a financial problem that means they cannot pay. Their house is repossessed.

I think it is high time we fought against this and based on a tier system and the number of years one has paid back – should not loose everything.

People’s lives are ruined time and time again by repossessions after years of paying.

It is high time the Council of Mortgage lenders came up with a scheme that will stop the practise of selling their house for a pittance and chasing them for the balance.

Can Which do something about this?

I don’t think people should be taxed at all when they move home. After all, one of the reasons Apartheid South Africa was a pariah nation was because of restrictions of movement. Also various governments have tried to encourage mobility of the workforce. Penalising people who drive too fast makes them slow down. Penalising relocation gives the message that the government prefers people to stay in one place.

The process of buying and selling homes is far too stressful. This is partially due to the huge numbers of hangers on who claims fees, and the growing demand for various reports by mortgage lenders. They don’t care — they are all paid for by someone else.

It is possible to do a week’s course on something like counting and classifying light bulbs and then charge a hapless buyer for an energy report. I was even told by an energy company that some people were getting certificates to qualify them to make these reports after only an hour and a half’s study.

Of course people buying business premises or buy to rent properties should pay a tax penalty commensurate with that when buying stock exchange investments.

A sliding scale based on the price of the deal paid by the seller would be better than one paid by the buyer. Placing the tax penalty on the buyer generates the “I don’t care someone else is paying” mentality on the seller. It is the seller who is in control of the transaction, unless it is a public auction.

Tracy says:
4 December 2014

Hopefully this will work, and not just a publicity stunt. I’ll be interested to find the results and what the outcome will be.

Don Wurkin says:
4 December 2014

How on earth do people think there will be a positive effect on their finances when the chancellor has announced an enormous increase in the cuts to public services?

The cuts were not targeted on services, but on the numbers of public servants, a huge proportion of which are not employed on front-line delivery. There is massive scope to streamline the provision of public services, both at national and local government level. As an example – take local roads, the responsibility for which falls to the Highways Departments of County Councils. They have armies of people sat in offices all day absorbing huge sums of public funding – from Council Tax and from Central Government Grants, but little of it results in maintaining our local roads to a decent standard. This example can be repeated across a whole raft of services, where so little of the funding we provide actually ends up in what we need.

It is not possible to finance public services from taxes on easily identifiable small groups with few votes but lots of money. A general increase in income or expenditure taxation would result in less economic activity, and so the tax take falls, and with it public services. Income tax was once over 30% and purchase tax the same.

Financial penalties alter people’s behaviour — that is why fines are often an effective punishment and preventative of undesirable behaviour.

The only solution is more efficient public services, and fortunately technology advances can help with this.

For example, genomic medicine can cut the expenditure on prescription medicines by a significant amount, and this will get phased in over the next couple of decades, or even sooner if the political will is there. (Knowing someone’s genome enables doctors to be sure whether a particular medicine will work.) Effective pharmacology will cut back on the need for surgery and hospitals. A health service needs to help as many perfect strangers as possible. Pharmacology enables doctors to help far more people than expensive operations which can only help one at a time.

The application of science rather than crowd gut reaction has the potential to reduce crime. Imprisonment is very expensive and again affects individuals one at a time. Alternative and more effective methods will reduce costs.

The application of ever increasing computing power should replace the enormous waste of resources by legal administration. I don’t know what the gross income of the legal professions (solicitors, accountants, estate agents, IFAs, insurance people etc) as a whole are, but it doesn’t bring the same benefits as housing or infrastructure, and whatever benefits it does bring affects individuals one at a time and are not long lasting. Remove this inefficiency and society as a whole benefits.

I agree with AQ on the need to carry on cutting back the excessive spending of public authorities. So long as our local councils carry on delivering soppy magazines full of self-congratulatory guff about doing what they’re there for I shall not take any notice of their carping and bleating about reduced government funding. They should look at the size and cost of their public relations department before they pare another penny off the social care budget.

And I also agree about the inefficiencies of highways maintenance. When I lived in London I used to wonder why there needed to be thirty-three different organisations responsible for lighting the streets, with 33 different arrangements of lantern, column, spacing, and lux values. At least in shire counties there is a degree of standardisation within each county but I am sure savings could still be made by unifying the management and administrations across whole regions. I suspect that even today, notwithstanding the recent cuts, there are still some untouchable fiefdoms that need to be tackled with a scythe not a grapefruit knife.

The legal process for buying and selling a property should in the 21st century be relatively simple. With the advent of high speed networking and modern I.T, technology Solicitors, Building Societies
and Land Registry staff. should be able to streamline the process and cut out the need for trivial extras such as letters and postage etc, not to mention exorbitant settlement fees from lenders.
I see no reason why a property transaction should take more than 4 weeks to conclude given the above logic.

kevin may says:
4 December 2014

What happened to the ticket booking fee etc. campaign. all has gone very quiet on that one?


Hi Kevin, since the launch of our Play Fair on Ticket Fees campaign more than 50,000 people have signed our petition. We managed to make ticketing companies show their fees upfront. When it comes to the level of fees, major players failed to change. We have therefore taken your support and our findings over to the CMA.

You can read more about it here: http://www.which.co.uk/campaigns/ticket-fees/deadline-cma-ticketmaster-seetickets–17072014/

While this is good news for people who can afford to buy their own homes, many in the UK can’t. I see a massive shortage of social housing.. Private landlords also need to be rained in to make sure that the homes that they put out for rent meet the decent homes standard with strong enforcement action

bob whitfield says:
6 December 2014

As soon as Thatcher sold off our social housing the situation we now see was always going to happen. She also sold our gas,power,water railways,decimated our industrial base,our steel manufacture , mining comunities the list goes on. Cameron is simply carrying this on. The NHS IS BEING PRIVATISED BY STEALTH, yet still they vote for these lunatics.

Those industries once privately owned by the government faired no better then than now they are owned by members of the public who bought shares. At least they can pay dividends according to their performance and not when told to by government (apart from corporation tax), and they can raise further capital by rights issues. In addition, the government gets income from the capital gains penalties levied on those who successfully trade in the shares.

I do think it was a big mistake not to ring fence money raised by the sale of council houses to build more, especially on brown field sites near to places of work.

Fully agree with John. The protection enjoyed by these state owned industries led them to operate inefficiently, knowing that they had a captive audience, making them each a monopoly. In the case of energy companies, I’m not convinced that they have improved much in terms of customer service – especially the big 6 and their common pricing structures. Bob mentions the mining industry, but many of us will remember the stranglehold the NUM had on us all, which nearly crippled the country. Ironically during that time, the power generating sector started importing coal all the way from Australia, because even with the cost of shipping it half way round the planet, it was cheaper than our home produced coal.

The Thatcher government’s policy of selling Council Houses to tenants was a brave attempt at a bit of social engineering. Before the scheme, we were a nation of 50% house ownership and 50% rental. Almost overnight that ratio changed to 70:30 – quite clearly demonstrating the principle of an Englishman’s home is his castle. However, as John says, with no ring fencing of any of the proceeds to fund future social housing, we now have a shortage of such homes for that sector. The problem with nearly all governments is that they never look far enough ahead – they only plan for their term in office, so we end up with quick fix short term policies, instead of policies which should deliver more sustainable long term benefits to us all.

Osborne’s predictions have been constantly wrong & his promises broken, for example his pledge to retain our AAA status – not achieved.
His pledge to eliminate the deficit during this parliament – not achieved.
His pledge to reduce borrowing – not achieved, in fact it’s increasing.

Now he wants to inflict even more cuts – is this multi-millionaire chancellor feeling the pinch? Of course he is because we’re all in this together!

4 December 2014

There are too many people lining their own pockets in this country. It’s time a stop was put to it. Politicians expenses claims!!
The owner of BHS, Dorothy Perkins groups gets away with non payment of taxes as his companies are in his wife’s name!! What he alone is allowed to skim off the tax system would probably make a huge dent in the repayment of the deficit. So NO George we are not ALL in it together. Is everybody in authority crooked??!!! We heard today the government would not let the responses of the Border Agency staff be reported on, and that they were now more efficient despite the massive cuts!!! Can we assume then that it is a mystery as to HOW all the illegal immigrants get into Britain!!! WHY doesn’t somebody, Anybody step up to the plate!!!!!

Marian Wingrove says:
5 December 2014

More help for homebuyers but nothing for the less affluent who have to rent. How about a cap on rents and vastly more social housing. This would also help to bring the housing benefits bill down. The Govt moans about the large benefits bill ignoring the fact that it is landlords who receive a lot of this and working tax credits subsidise poor wages paid by companies like Amazon.

A cap on rents was tried before, and it stops the supply of rented housing, unfortunately. The only real solution is a cap on new people, but this has also been tried before (in China) and has been very difficult and the method there has not really worked.

Humanity cannot grow in numbers forever, particularly if space colonisation remains a pipe dream.

Another problem is that people are not taught as to how to live together, or even encouraged to maintain their marriages. Hence there is a growing demand for low cost single person housing for people impoverished by divorce litigation. “Starter homes” are often “homes for the failed”.

The budget forecasts will make on difference to most people, the political parties will always feed us bulls..t before any election, then sit back for another 5 years, jacking up their expenses, especially the ‘champagne socialists’ like the Milliband brothers. What will they do about mansion taxes if they get in? Ed Miliband lives in a £2 million house, and David, I gather, is pulling £2 Million a year in fees these days! What about ‘T bone’ Blair, and all the dosh he’s been stashing away since he handed power over to the useless Gordon Brown?
Nobody in the government is doing anything about big business and banks, who really don’t give a damn about their clients, and strive to make more profits to feather their own nests rather than give value for money. Their scams like the PPL and Foreign exchange rates, have crippled many people, but nobody is being punished for these things??? Why not?
Come back Maggie, you were the only politician who told the truth.
You must be up there in Heaven laughing your head off at this bunch of idiots.

How true – the public is always treated with total disdain. We are the fodder upon which politicians and so many others live the life of Riley. Even when banks and energy companies are “fined” millions for their wrong doings, it does not hit those who are responsible for their actions and decisions. They simply disperse these fines amongst their normal operating costs, which are recovered in the pricing structure for their products, so we, the customers, end up paying again for something we have already been overcharged for. It’s heads they win and tails we lose.

I couldn’t agree more. This extends to all those “serving” across the counter, whether in banks or insurance or estate agents or solicitors at law.

If you go into a shop and hand over money you get something, and you have usually chosen to want that “something”. The shop or manufacturer could have pulled the wool over your eyes a bit as to the value of the something, but at least you get it, and can sell it on (although probably after a depreciation loss).

However for all these people who are administrators, they are just smiling amongst themselves as to how they can get money for mere words in the air or on pieces of paper.

Over the years there has been a shortage of houses but now we have an immigration boom, closely followed by an immigrant baby boom there will be a huge shortage of houses for many years to come, giving builders(who made a large donation to the Tory party)the excuse to build on the many acres of green fields they have been holding for decades.

Jinnii says:
6 December 2014

I cannot believe the true cost of arranging a mortgage is as expensive as the banks, building societies and other lenders charge. I realise these businesses have to make a profit but WHY charge such outlandish fees for arranging a mortgage. They make enough over the years on the interest they charge on their loans, to be able to charge the actual cost of arranging a mortgage OR no charge at all.
The government still need to do more about Stamp Duty. For example if a person is moving area (e.g.to look after an elderly parent, for work) and have not downsized but bought the same size home and put all the proceeds from their current home towards their new one THEY SHOULD NOT have to to pay stamp duty. NO stamp duty should be paid on a modest first time home or when moving and not gaining any profit from the sale.

Agree entirely with Jinnii. Unfortunately, stamp duty is simply just another source of tax income – but certainly very unfair to those who are not moving upmarket, but merely having to pay more because of location. There are lots of unfair taxes – the trick is to find alternatives to replace them with something that makes more sense. Or better still, seek ways of reducing government expenditure (and Local authorities’) so that less taxation is needed.