The tax increases and spending cuts announced by Jeremy Hunt in last week’s autumn statement, have set the scene for what is expected to be the biggest drop in living standards on record. Hunt insisted it was a “compassionate” attempt to balance the books, with an extension of the government’s energy bill support scheme and confirmation that, in April, both the state pension and means-tested benefits would go up in line with inflation. But are there winners? And who are the losers? We ask the experts. The low-paid and unemployed Winners: The state pension, and benefits such as universal credit and pension credit, will increase by 10.1% in April in line with recent inflation figures. The minimum wage, affecting 2 million workers, will go up nearly 10%. These often won’t cover someone’s “personal inflation”, as the poorest spend most of their income on essentials where prices have increased much more. An extra £900 cost-of-living help will be given in 2023 to people on benefits, with £300 for pensioners, and £150 to people on disability benefits. The £900 is an increase on the £650 in 2022, although the £150 help with council tax will not be repeated. Losers: Millions of people earn a bit too much to get benefits – they are the biggest losers. Increasing the energy price cap, and ending help with electricity bills, will see many paying £900 a year more from April. For those already in energy bill arrears, the failure to introduce a social tariff for energy is very disappointing. Fuel duty has not been frozen, so petrol prices will increase by about 12p a litre. Housing costs will get worse with mortgage fixes ending, and private renters facing rent increases. Freezing the basic-rate tax level will eat away at wage rises. And the big unknown is how many people will lose their jobs in the recession, with the OBR estimating that figure at more than half a million. Sara Williams, Debt Camel Investors Winners: One of the main purposes of this budget was to clean up from the disaster that was Kwasi Kwarteng’s mini-budget. The winner, therefore, is the gilt market, which has stabilised, and sterling, back on the way up. With the bleak outlook for the UK economy highlighted by the chancellor, investors are likely to find value in the large companies of the FTSE 100, which earn three quarters of their revenue outside the UK. With tax allowances frozen, and many more people set to fall into both the 40% and 45% tax bands, the fact that a mooted raid on pension tax reliefs didn’t happen is a positive for investors. Demand is also likely to grow for venture capital trusts and enterprise investment schemes, which offer 30% income tax reliefs. Losers: As the coming recession deepens, the losers are those with shares in domestically focused businesses, especially retailers, hospitality and travel firms. The property sector is facing the prospect of falling house prices and rising vacancies in the commercial sector, as companies go bust or close stores. While banks have benefited from rising interest rates, the recession also means an inevitable rise in bad loans that have to be written off. Those with investments held outside of Isas or pensions are also set to lose from savage cuts to the annual tax-free dividend allowance, and the capital gains exemption. Jason Hollands, Bestinvest Pensions Winners: After a dizzying number of U-turns on the pensions triple-lock promise, the chancellor confirmed that state pension payments would see a healthy increase of 10.1% in line with the September inflation rate. This will give pensioners an extra £963 a year and will largely protect them from inflationary rises in the cost of living. There was relief after mooted changes to the pensions lifetime allowance and the pensions tax relief did not happen. The most vulnerable pensioners will receive an additional one-off £300 next April on top of the current pensioner cost-of-living payment. The energy support package will be extended beyond April with a new energy cap of £3,000, a £500 rise on the current one. Losers: The two-year extension of the freeze on the pensions lifetime allowance to 2028 means more and more savers face paying 55% tax on amounts above the cap, which could discourage people from saving. The statement hints that those approaching retirement may see the state pension age increase faster – we will find out when the review is published early next year. The state pension age is currently 66, and two further increases are already set out in legislation. But it could happen a lot sooner if the review determines that rules around pensionable age are out of date based on the latest life expectancy data and other evidence. Myron Jobson and Alice Guy, Interactive Investor Housing and property Winners: A key element of the statement was not to spook the markets in the same way the mini-budget managed to do. It’s unlikely there will be any unexpected stress on funding costs for lenders, so there’s room for mortgage borrowers to see fixed rates continue to ease back, and five-year rates have dipped below 5%. Support for mortgage interest will now be available after three months, rather than nine, which could provide valuable assistance to those on universal credit. The losers: Rising interest rates are already causing borrowers to reset their expectations, but affordability may also be tighter as extra costs weigh down what lenders offer. One of the few remaining elements of the mini-budget was the improvement to stamp duty land tax, although that has now been given a more limited timeline, which brings pros and cons. Rather than be withdrawn instantly, it will last through to March 2025, reducing upfront costs for buyers. That’s unlikely to stoke major demand in the short term, but having a shelf life will pose a dilemma for prospective buyers as to when they should make a move. The deadline will inevitably see some bring a house move forward. David Hollingworth, L&C Mortgages The young Winners: There was good news for the 2 million workers on the national living wage, as they will see their hourly rate increase by 9.7% to £10.42 from 1 April 2023 (up 10.9% to £10.18 an hour for those aged 21 and 22). Elsewhere, benefits are being increased by 10.1%, in line with inflation, and there will be a 7% cap on the maximum rise in social housing rents in 2023/24 – not targeted at the young, but positive news all the same. Losers: Private renters will feel left out once again as they face unchecked rent rises. To make matters worse, the stamp duty land tax cuts, and additional relief for first-time buyers, are now going to be scrapped after 31 March 2025, meaning that those wanting to get on the property ladder could have to pay thousands more in tax. Also, by freezing the income tax thresholds, it means that, over time, more low-earning young people will be pulled into paying tax sooner, by so called “stealth taxation”. Given that young people have less untaxed income sources, they tend to feel the tax hit the hardest. Damien Fahy, Money to the Masses