Autumn Statement 2023 – Rewarding work

The 2023 Autumn Statement was targeted at “rewarding work”. This included a number of policies:

National living wage and national minimum wage

The first policy was aimed at “ensuring work pays”.

The Government announced an increase in the national living wage from 1 April 2024 of 9.8%, which raises the hourly rate for over 23-year-olds from £10.42 to £11.44. The Chancellor has also reduced the age threshold for the national living wage from 23 to 21 years old.

The increase to the national living wage will result in an annual earnings increase of £1,800 for a full-time worker and is expected to benefit 2.7 million low paid workers.

The national minimum wage will also increase from April 2024:

Age Increase Hourly rate
23+ 9.8% £11.44
21-22 12.4% £11.44
18-20 14.8% £8.60
16-17 21.2% £6.40
Apprentice 21.2% £6.40

In addition, the accommodation offset rate will increase by 9.8% to £9.99 per hour.

State pension

To protect the most vulnerable, the Chancellor announced an increase in state pensions, in line with current inflation rate of 8.5%, from April 2024, maintaining their ‘triple lock’ commitment. The new state pension will be worth up to £900 more per year.

Reforming the welfare system to support people into work

Building on the announcements of the 2023 Spring Budget in relation to tax free childcare and support for those with health conditions or a disability, the Government has gone further to bring those people of working age back to work.

Long term unemployment

To support the able-bodied, long term, unemployed the Government will invest £1.3 billion over the next five years to tackle long term unemployment. The universal credit system sanctions regime will be intensified, with engagement in the system being mandatory otherwise there will be a complete loss of benefits.

Unemployed claimants will receive regular support and, if they have failed to find a job after six months, as opposed to the current nine months, they will be referred to an intensive scheme for 12 months. The scheme will provide tailored support to tackle barriers to employment.

Claimants who are still unemployed after completion of the 12-month scheme will be reviewed again and, if no suitable local job is available immediately, the claimant will be required to undertake time-limited mandatory work placements designed to increase their skills and improve their employability.

A claimant who refuses to accept the conditions, without good reason, will have their universal credit claim closed.

These reforms should ensure no claimant reaches their claimant review point at 18 months of unemployment in receipt of their full benefits unless they have taken every reasonable step to comply with Jobcentre support.

Long term sick and disabled

A separate fund of £1.3 billion has been allocated to the long term sick and disabled to boost back to work support over the next five years by giving people greater access to mental health treatment and employment support.

Fit note reform

The Government will review the fit note process to support more people back into work after a period of illness. A consultation will be launched in 2024 on wider reforms to examine options for improving fit note assessments and access to specialised employment and health support.

Universal credit increased with inflation rate

Universal credit and disability benefits will increase by 6.7%, in line with September 2023’s inflation rate. This is expected to benefit 5.5 million households gaining over £470 on average in 2024-25.

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