Irwin Mitchell Experts Share Their Views
Chancellor Jeremy Hunt delivered his Autumn Statement on Wednesday 22 November 2023 setting out the Government’s tax and spending plans.
See comments from Irwin Mitchell experts on the Chancellor’s Autumn Statement today:
Property - comments from Jeremy Raj, Head of Residential Property at Irwin Mitchell
“The promise of ‘a range of measures to improve the [home] buying and selling process’ is to be cautiously welcomed but most in the industry will want far more detail before they can judge, and the £3M promised for this will not go far. Having said that, a great deal of excellent work has already been done in this sphere by a number of organisations and there is no doubt improvements can be made to both the process and at the Land Registry. The technology is already available to radically improve things, but Government requires a clear vision to ensure any reforms are robust and future-proof, not just a wish to make things ‘better’. Likewise the digitisation of local council property data is a much-needed reform that could cut transaction times but it must be properly funded and so far I have been unable to find any reference to extra money for this.
Anything that eases the plight of renters – such as the increase to the Local Housing Allowance - is of course to be welcomed, but many will be left feeling that this is too little, too late to have a material effect on affordability. With rising mortgage and other costs, it is also likely that the payments will simply wash through to service landlords’ increased borrowing or costs.
Conveyancers will be breathing a collective sigh of relief after early rumours of yet more tinkering with SDLT rates proved to be unfounded. The mayhem following previous SDLT “holidays”, temporary rate changes and new reliefs has left many of us distinctly wary of Chancellors and their statements. Temporary massaging of the property market through such announcements have often led to frantic subsequent activity that left many conveyancers exhausted and fed up, but perhaps more importantly left homeowners desperate to meet deadlines in artificial markets, and subsequently wondering whether they did the right thing.
Despite relief that the statement did not include any SDLT tinkering, there is still a strong case for a significant review of the tax, and even for its abolition. Alternatively there are plenty of innovative options that should be properly considered, for example fiscal measures to encourage potential downsizers to take the plunge and move out of unsuitable, expensive and much-needed larger homes. In the continued absence of adequate levels of delivery of new homes, this could be an innovative and accessible way to address the shortfall. The market would be considerably freed up, and millions of unused bedrooms made available to families or others that really need them. What is really needed is a well-thought out and comprehensive review of all property taxes, based on the fundamental aim of ensuring more people are in the accommodation they need to suit their personal circumstances, finances, health and overall engagement with society, as well as the energy efficiency and sustainability of those homes.”
Pensions - comments from John Thornber, Investment Manager at Irwin Mitchell Asset Management
“The Chancellor has announced reforms to personal pensions, which as anticipated, are to allow pension portability, helping ordinary workers to keep a better track on their pension pots. Importantly, by allowing existing pots to be moved it reduces (the largely unfounded) fears that this will make the terms available to savers less advantageous, when actually, competition between existing pension firms should work in the opposite direction.
Increased flexibility should open the door to savers who have utilised Self Invested Personal Pensions, many of which can take direct contributions from employers. The flexibility of these vehicles naturally makes them more costly than pre-packaged products but if they are attractive to a wider audience this should allow pension providers the ability to reduce costs through economies of scale.
Such vehicles can be particularly attractive to savers who wish to see their pension fund used in a specific manner, perhaps targeted environment impact investing, or focusing on innovative technology that can help develop real change, which is becoming more important to young professionals thinking about the world their children will inherit.”
IHT - comments from Ian Bond, Lifestyle and Estate Planning Partner at Irwin Mitchell
“It seems to have become traditional that in the run up to Chancellors’ statement (and Budgets), rumours are leaked to the media about potential inheritance tax changes including cuts to IHT rates, reform of exemptions and/or reliefs, or it being scrapped. The outcome is nothing changes. It will be a relief to individuals who have done sensible planning that nothing has changed and they can continue with their plans.”
Social Care - comments from Stewart Stretton-Hill, Senior Associate at Irwin Mitchell
“The autumn statement was noticeably silent on social care. The commitment to the 8.5% triple lock rise to state pension will be welcome news to those receiving state pension as it will be worth up to £900 more per year but will this make a dent for those who require care?
“The minimum wage hike by nearly 10% will also be welcome news to those on low income but there is likely to be a knock on effect for those receiving care. The average wage for carers in 2023 was £10 per hour1, below the current minimum wage. So, rightly, we can and should see a proportionate increase in carers average wages.
“Live in care can be around £1,500 per week with a large proportion of that cost attributed to employing the carer. Proportionate wage increases could see the cost of care increasing by several thousand pounds per year meaning that those in care could see their capital savings dwindling faster and more people relying on state support to fund their care.
“The increase to state pension might pay for a couple of days care per year but, overall, most pensioners in care will probably be worse off. These knock on effects of government budgeting emphasise the need for careful financial planning early on in life to ensure a secure and comfortable future."
1 – source research published on nurses.co.uk