Response to Autumn Budget 2024

Money Advice Scotland welcomes the UK government’s recent budget announcement and its promising steps towards enhancing the financial wellbeing of people and families across the UK. The policies introduced reflect a commitment to alleviating financial pressures, but we believe more could be done to lift people out of poverty and to address inequalities within the benefits system. 

We are encouraged by the government’s decision to increase the minimum wage, especially as it reflects a commitment to listening to stakeholders like the Low Pay Commission. Raising the minimum wage is an essential move toward improving living standards for those on the lowest incomes. We also applaud the intention to work towards a singular adult minimum wage for all workers over 18, which emphasises the Government’s focus on fairer wages for all workers. 

We also welcome changes designed to help those struggling with the cost of living. The reduction in maximum debt deductions from Universal Credit, the increase in the earnings threshold for Carer’s Allowance, and the extension of the Household Support Fund show a willingness to support vulnerable households.  

The freeze on fuel duty, a tax cut worth £3 billion, will save motorists close to £60 annually and offers some relief to those impacted by rising fuel costs. We are pleased to see working-age benefits uprated by 1.7% and the State Pension and Pension Credit entitlement both increased by 4.1%, allowing pensioners to earn up to approximately £11,800. This boost will help many low-income households across Scotland. 

Additionally, the government’s commitment to maintaining current rates for income tax, VAT, and National Insurance until at least 2025 is a welcome assurance to households seeking stability in their finances. The announced allocation of £3.4 billion to the Scottish Government also presents a valuable opportunity for Scotland to improve the financial wellbeing of its residents. We hope these funds will be strategically allocated to deliver maximum social benefit across the country. 

While we see significant promise in this budget, there are areas where other reforms could further strengthen the safety net for those most in need. The planned rise in interest on unpaid tax debt, though not yet quantified, could add undue pressure on individuals who are already struggling with debt. Additionally, while the government intends to increase employers’ National Insurance contributions by 1.2% from 2025, we are still concerned about the potential impact this may have on employees, as companies absorb these costs. 

The proposed changes to the Work Capability Assessment raise significant concerns, as over 400,000 seriously ill and disabled individuals may see their support reduced by £416 per month, with the added risk of sanctions. This move risks pushing some of the most vulnerable people further into hardship and could be counterproductive in terms of welfare savings. 

We also believe that the government’s decision to delay adjustments to income tax thresholds until 2028-29, with adjustments to inflation beginning only then, is a missed opportunity to provide immediate relief to households. Moreover, the lack of an increase in remote gaming duty for offshore gambling companies is still a point of concern, as these companies often avoid UK corporation tax and contribute little to the UK economy. 

Finally, we note the government’s focus on reducing benefit fraud. While tackling fraud is a valid goal, we hope that this does not inadvertently stigmatise those in genuine need of support and we have concerns about how the powers to access bank accounts to try and identify benefit fraud will be used. This is an area that requires close monitoring to ensure that those worst off are not penalised for receiving the help they are entitled to.  

In summary, while we are optimistic about the positive effects of this budget on the financial wellbeing of people across the UK - we encourage the Government to continue reforming the benefits system to further support those in poverty and ensure that every policy choice serves the interests of the most financially vulnerable.