In a year that has had three Prime Ministers and four Chancellors there was much anticipation for the Autumn Statement 2022.  

After the disastrous economic statement from the failed Truss government this statement needed to calm markets. 

Essentially the UK spends too much money and has borrowed too much on the country’s credit card. The financial markets wanted to see how we are going to deal with our debt.  

This has resulted in a pretty negative statement from a tax point of view.  

Here are the highlights that are most relevant to your finances and what you need to do. 


The Autumn Statement highlights  

Income Tax

The tax free Personal Allowance will remain frozen for a further two years at £12,570 until April 2028.  

The threshold at which you start to pay higher rate Income Tax will also be frozen at £50,270 until April 2028.  

Higher earners were significantly impacted as the threshold for paying additional rate tax at 45% was reduced from £150,000 to £125,140. 

Those earning above this level will continue to lose their Personal Allowance.  

The main thresholds for National Insurance will also be frozen until April 2028. 

A reminder that Income Tax rates in Scotland are set by the Scottish government so we will have to wait until December to see how these may or may not change. 


So workers were hit and so were investors.  

Income received from shares and funds in the form of dividends will be taxed more as the Dividend Allowance will be cut from £2,000 to £1,000 from the start of tax year 2023/24 and to £500 from tax year 2024/25. 

Capital Gains Tax 

When you sell an investment like a share or second property if you have made a gain on your original investment then this gain will be taxed more.  

The Capital Gains Tax allowance will be reduced from £12,300 to £6,000 at the start of tax year 2023/24 and to £3,000 from tax year 2024/25.  

The rates of Capital Gains Tax will remain the same and depend on what type of investment you are selling and the level of your other income. 

Inheritance Tax 

As a reminder, Inheritance Tax is only due on estates over £325,000. This is called the Nil Rate Band.  

This allowance will continue to be frozen at this level until at least April 2028. It has already been frozen at this level since 2008/09. Will it ever go up? 

The Residence Nil Rate Band, available for the family home will also remain frozen at £175,000. 

State Pension 

Good news for those receiving or about to receive their State Pension. This will be increased by 10.1% in line with inflation.  

Stamp Duty 

The recent increase in Stamp Duty thresholds when purchasing residential property in England and Northern Ireland will remain for now but have been changed to temporary. They are due to be changed back on 1st April 2025. 


What to do following the Autumn Statement 

Freezing tax allowances has been the government’s preferred way to increase tax revenues over the last few years.  

It’s sneaky because they can say they haven’t actually raised the rate of taxes. However, despite the doom and gloom around the UK’s growth prospects, the economy does tend to grow over the long term, so do wages and investment returns. 

Therefore more and more people will be dragged into higher rates of tax.  

In some ways a lot of this statement was irrelevant and some of these freezes last way into the future when who knows what the economic situation will be like.  

We know that economic predictions are always wrong so I’m guessing some of these policies will never actually implement as planned.  

However, for now we can only work with what we’ve got.  

Thankfully pensions and ISAs were left untouched so it makes even more sense now to get as much of your wealth protected in these tax efficient wrappers.  

Higher rate Income Tax payers will get tax relief on contributions to a pension and dividends and capital gains are not taxed if the investment is inside a pension.  

If you hold an investment outside of an ISA like a second property for example and you were planning to sell it may be better to do this sooner rather than later to avoid the Capital Gains Tax allowance cut.  

From an income point of view it still makes sense to receive more of your income in the form of dividends rather than other income. Dividends are still taxed significantly less at 8.75% for basic rate tax payers compared to 20% for other income.  

Therefore it may be better to take dividend income from investments before income from a pension as you also have the added benefit of money purchase pensions usually being exempt from Inheritance Tax.  

For those due to receive their State Pension and planning to carry on working, rather than deferring your State Pension consider taking it and re-investing it into a personal pension. Deferring usually means you have to live around 17 years to break even on the year you have given up. By contributing to a personal pension you will likely get full tax relief and the government is paying into your pension! 

If you feel you are paying too much in cash or don’t have a plan to navigate these new Autumn Statement changes please get in touch for a free no obligation 15-minute call. We would be happy to review your position, explain where you stand and what you need to do to get the retirement you desire. We’ve created hundreds of happy retirements, this could be you too! 

Risk warning:

Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.