Saga's Autumn Statement 2015 round-up

Chris Torney / 26 November 2015

We've picked through George Osborne's Autumn Statement to bring you the main points about the state pension, tax credits and buy-to-let landlords.



The combined Autumn Statement and Spending Review delivered by Chancellor George Osborne contained as number of surprises, as well as long-awaited details of the new state pension.

The biggest shock was the Government’s decision to backtrack on planned tax-credit cuts. But there were also important announcements for motorists, landlords and would-be homebuyers.

State pension details

Osborne confirmed that the basic state pension paid to current pensioners, as well as those retiring before the end of the current tax year, would rise from £115.95 to £119.30 on April 6.

For anyone who reaches state pension age on or after this date, the new flat-rate payment will apply: initially, this will be set at £155.65, although not everyone will qualify for this full rate.

Will you qualify for the full flat-rate state pension?

Council tax and social care

Local authorities will be given the option of increasing council tax bills by up to 2% in order to cover the soaring cost of social care for older residents. This could raise as much as £2 billion a year.

The Chancellor also said that the NHS budget would be increased from its current £101 billion a year to £120 billion by 2020-21.

Extra costs for landlords and holiday homeowners

The Government revealed more bad news for landlords. In the summer Budget, Osborne said that higher-rate tax relief on buy-to-let mortgage interest would be phased out from 2017, and he now plans to raise stamp-duty levels on the purchases of both rental property and second homes.

Rates will be 3% higher than on residential property: in total, landlords and second-home owners will pay an extra £1 billion in stamp duty by 2020-21.

New help for buyers

The Government is trying to make investment in buy-to-let in particular less attractive (see above) in order to boost the supply of homes to the likes of first-time buyers.

But ministers are also planning to increase the number of new homes built by 400,000 over the next five years. Half of these properties are to be designated as starter homes, and a large proportion will be available under a state-backed shared-ownership scheme. This will reduce the cost of making the initial purchase, but will mean that any gains in value will be divided between the owner and the Government or mortgage lender.

A separate scheme will help first-time buyers get on the property ladder in London: this will allow individuals to put down a 5% deposit and get a 40% interest-free loan.

Cheaper motor insurance

Osborne said new measures were in the pipeline to reduce the number of fake personal-injury claims made following road accidents. This is one of the main factors behind the sharp rise in motor-insurance costs over the past decade.

Minsters want to end the practice of making cash payouts to whiplash victims, and propose that more injury cases are dealt with by the small-claims court.

The consequent reduction in costs could see annual premiums fall by around £40 or £50, the government says.

Don't get caught out by a crash for cash scam.

New pothole fund

Ministers say that an extra £250 million will be set aside over the next five years to deal with the rapidly deteriorating state of the UK’s roads. A number of recent surveys have shown that potholes are one of the major sources of frustration for British motorists.#

Read our guide to claiming for pothole damage.

Reduction in energy bills

From 2017, Osborne said, the levy imposed by the government on the UK’s gas and electricity firms to cover the cost of environmental measures will be reduced. This is likely to lead to a fall of around £30 in the typical household’s fuel bills.

Top 10 energy myths busted.

Tax-credit U-turn

In his summer Budget last July, Osborne announced plans to make substantial cuts to the tax credits received by millions of families. Over the last few months, however, the policy has received a growing level of criticism due to the sharp falls in income that many recipients would face.

Osborne now says that recent improvements in the public finances mean these cuts are no longer necessary and has cancelled the policy.

However, tax credits are being gradually replaced by the universal credit over the next few years, and universal credit payments will in fact be subject to the limits that had been planned for tax credits.

Government budgets

As well as an increase in the health budget, Osborne said that spending on education would rise over the rest of this Parliament. And he revealed that there would be no cuts to the police budget – a sharp fall in police spending had been widely expected.

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