Four big money changes Jeremy Hunt could announce in his Autumn Statement

There are just days until the government reveals its spending plans for the coming year, but already it seems there will be major implications for millions of people. Chancellor Jeremy Hunt is set to give his Autumn Statement on Wednesday, November 22 and is expected to focus on helping struggling families with the cost of living crisis.

The Autumn Statement is one of the key events in the political calendar as it gives a clear indication of how household income will be impact in the coming year as well as setting out how much will be spent on public services like health, education and public transport.

On Wednesday at around 12.30pm Mr Hunt will also give an update on the country's finances and the government's tax and public spending plans, based on the latest forecasts from the Office for Budget Responsibility (OBR). He is expected to announce a growth-led plan aimed as business with measures to also tackle inflation which, at 4.6%, is over double the government's 2% target, and soaring government borrowing.

Some indications have already been given as to what we can expect from Wednesday's statement - here is what is likely to be included and how it will affect you. To get the latest money stories straight to your inbox twice a week sign up to our newsletter here.

READ MORE: DWP universal credit claimants face losing support in huge crackdown

READ MORE: All the DWP cost of living payments and benefit changes in December

Tax cuts

One of the major rumours is that the chancellor will cut income tax in a bid to encourage growth. According to stats from the Office for National Statistics monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in August, following a fall of 0.6% in July.

On Sunday Mr Hunt told the BBC's Sunday with Laura Kuenssberg that he wanted to put the UK on "the path to lower taxes" but would "only do so in a responsible way" that did not "sacrifice the progress on inflation." When asked if he would cut income tax, he said he would not comment on a decision ahead of the statement.

The Government is believed to have considered cuts to National Insurance, income tax or inheritance tax, at least one of which may happen on Wednesday. A report in the Sunday Times said that cuts to income tax or national insurance were being considered by Mr Hunt.

Tax cuts appeared to be confirmed by Rishi Sunak on Monday with a priority on business. "The second decision we’re taking is to cut tax and reward hard work,” the prime minister said in a speech in north London.

“What clearer expression could there be of my governing philosophy than the belief…that people, not governments, make the best decisions about their own money.”

Inheritance tax (IHT) is currently charged at 40% over the tax-free threshold of £325,000. Any changes to inheritance tax wouldn't affect the majority of the population - only 4% of estates paid inheritance tax in 2021.

State pension announcement

Mr Hunt's statement is likely to include something on next year's state pensions rate. Currently the triple lock rule means pensions rise in line with the highest out of three measures - CPI inflation, earnings growth or 2.5%.

This year earnings growth is highest at 8.5%. but there have been rumours that the government will not honour that figure and could instead use earnings data that strips out the impact of bonuses and one-off payments. That would mean a smaller increase of 7.8%, saving about £1bn. You can read more about that here.

Tougher benefits rules

Wednesday could also see stricter sanctions for millions of people on certain benefits. The penalties will apply to people sanctioned for more than six months, who also face their claims being closed.

Announced last week as part of the government's Back to Work plan, the measures will also include digital tools being used to track claimants' attendance at interviews and job fairs under the toughened sanctions regime.

The Treasury said "stricter sanctions" would be imposed for people "who should be looking for work but aren't." They will include "targeting disengaged claimants by closing the claims of individuals on an open-ended sanction for over six months and solely eligible for the universal credit standard allowance, ending their access to additional benefits such as free prescriptions and legal aid." You can read more about the new rules here.

There are other benefits changes being rumoured. It has been reported that claimants could have their bank accounts checked as part of strict new rules being considered and you can read more about that here.

There has also been speculation that the government could change how it sets the rate at which benefits increase for the next financial year to save it money at the expense of hard-up households.

Traditionally benefits are set using the inflation rate for the previous September, which this year was 6.7%. But it has been reported that the government could instead base the increase on October's lower rate of 4.6% - a move which could see claimants lose out on £3 billion over five years, according to the Institute for Fiscal Studies.

First-time buyer help

There is also speculation that ministers may extend the mortgage guarantee scheme for another year beyond the end of December 2023, at least for first-time buyers. Under the scheme, the government backs lenders who offer 95% mortgages, which enable homebuyers to put down a deposit of just 5% of the home’s value.

According to mortgage lender Halifax, the price of an average first home fell slightly over the 12 months to August 2023 but can still be as much as ten times average earnings in some areas.

The scheme has attracted criticism from some who have claimed it also leads to increased demand for housing which, without a commitment to building more houses, leads to stubbornly high prices.