Autumn Budget: What will the changes mean for people living with dementia and carers?
#General NewsNews posted: 1 November, 2024 Post by: Finlay
Time to read: ~ minutes, give or take.
On 30th October, the chancellor unveiled her autumn budget, introducing £40bn worth of tax rises to ‘rebuild Britain’. The budget introduced new changes to Carers Allowance, State Pension and changes to tax that may affect some of our Dementia Concern members.
Below, we'll explain what these changes are, and how they may affact people with dementia and carers.
Changes to Carers Allowance
The carers allowance earnings threshold is the limit on earnings a carer who is supported by the government through carers allowance can earn through their employment. Following the carers allowance scandal that saw some carers repaying life changing sums of money for minor breaches of carers allowance earnings limit, the chancellor has announced that the carers allowance earnings limit will rise by £45 a week.
This means that unpaid carers who are employed and seek carers allowance from the government can now earn an up to £196 a week (up from £151.90). This amounts to an extra £2,340 a year.
For carers who do so much for people with dementia in our community, this is a welcome change.
Additionally, the Chancellor has confirmed a government review into carers allowance, looking to remove “cliff edge” penalties for carers who overstep limits, even by the smallest margins.
It’s also worth noting that National Minimum Wage will be increasing from £11.44 to £12.21
Changes to the State Pension and Pension Credit
The government has confirmed that basic and new state pension will rise in line with the triple lock. The triple lock maintains that pension payments will rise in line with either the highest of earnings growth, inflation, or 2.5%.
The government has confirmed in the budget that pension payments will rise in line with earnings growth, meaning that payments will increase by 4.1% from April 2025 to April 2026.
This means that the new flat rate state pension will increase by an extra £472 a year, and the old basic state pension, will rise by £363 a year from April 2025.
Pension credit will also increase by 4.1%, meaning you’ll get £227.10 a week if you are single - a rise of £465 a year or a joint £346.60 a week if you have a partner - a rise of £710 a year.
You may get extra help if you’re a carer, severely disabled, or responsible for a child or young person.
More pensioners will become eligible for Pension Credit, and by extension, be eligible for Winter Fuel Allowance, a previously universal benefit for all pensioners, that has earlier this year been scrapped for those not receiving a means tested benefits.
Changes to Inheritance Tax
Whilst only 4% of estates in the UK are subject to inheritance tax (with this number estimated by the IFS to rise to 7% by 2032), it’s worth mentioning that there are going to be some new changes to how inheritance tax applies to pensions and death benefits.
The Chancellor has announced that some inheritance tax exemptions will remain in place for the foreseeable future. This includes estates that:
· Are valued at under £325,000 (fixed until 2030, and this allowance changes to £500,000 if you’re leaving a home to children or grandchildren).
· Anyone who leaves their estate to a spouse.
· Somebody who leaves it to certain charities or community sports clubs.
Pensions have previously been exempt from inheritance tax, but from April 2027, unused pension pots and death benefits will be subject to inheritance tax.
It’s worth reiterating that inheritance tax is only applicable to estates worth over £325,000 or £500,000 for qualifying estates.
Other key announcements for health and social care
The government will be providing local governments a £1.3bn additional grant, that will include £600m for social care, and the Chancellor has promised a 10-year growth plan for the NHS, targeting 2% productivity growth next year.
The Chancellor has also announced a £22.6bn increase in the day-day health budget and an increase of £3.1bn increase in the capital budget including £1bn for repairs, and £1.5bn for new beds in hospitals and testing capacity.
Whilst this general rundown of all the changes for health, social care and pensions, the Autumn Budget will affect everyone differently and its contents are not limited to the changes listed in this article. See below some valuable resources that will provide you more detail on the other changes in the Autumn Budget.
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