Chancellor Jeremy Hunt unveiled something for everyone in this year’s Autumn Statement, with cuts to taxes and proposals to make investing for your long-term goals simpler and easier. Here’s our take on the key things you need to know.

What’s happening to ISAs?

In a bid to simplify individual savings accounts (ISAs) and provide more choice for investors, the chancellor announced a number of changes from April 2024.

In one of the biggest ISA shake-ups seen in years, ISA holders will now be able to pay into multiple ISAs of the same type in the same tax year, so long as they stay within the annual ISA allowance limit1. The annual ISA limit will remain at £20,000 in the 2024-25 tax year.

Investors will also be able to make partial transfers between ISA providers. This means you could move your ISA to another provider part way through the tax year, should you want to.

Meanwhile, the chancellor announced plans to allow investors to buy certain fractional shares within their ISAs.  This relates to shares bought and sold on a stock exchange and not exchange-traded funds (ETFs) and mutual fund units, which are already allowed in ISAs2

Were there any changes to pensions?

The chancellor also announced the government would consult on a so-called pension ‘pot for life’.

This would give savers the right to ask a new employer to make contributions to an existing pension scheme when they change jobs, should they wish. It would give individuals greater control over their pensions and tackle the problem of people building up multiple small pots over their working lives.

While people currently have the option to switch their pots when they get a new job, or combine all of them into one pension plan, such as a self-invested personal pension (SIPP), many people lose track of them or may be paying over the odds in fees for older pensions.

For more on tracking down forgotten pensions, read our guide on how to track down a lost pension pot.

The chancellor also pledged to raise the state pension2 in line with average earnings growth of 8.5%, meaning the new state pension will be worth up to £900 more a year.

Meanwhile, the removal of the pensions lifetime allowance, which was announced in the spring Budget, has been confirmed for April 2024.

The lifetime allowance, which currently stands at £1,073,100, is a limit on how much you can build up in pensions in total over your lifetime. The tax charges for going over the lifetime allowance were abolished on 6 April 2023.

Under current rules, 25% of anything held in a pension can be withdrawn tax free. But from April 2024, there will be a limit to the 25% tax-free cash – also known as Pensions Commencement Lump Sums - of £268,275.

And what about tax cuts?

The chancellor announced that the main rate of employee national insurance contributions (NICs) will be cut from 12% to 10% from 6 January next year.

This will provide a tax cut for 27m working people, with the average worker on £35,400 receiving a tax cut in 2024-25 of over £4503.

For self-employed workers, the chancellor also revealed a cut in Class 4 self-employed NICs from 9% to 8%, from April 2024. To make the current NICs system simpler for the self-employed, Class 2 self-employed NICs (on profits above £12,570) have also been abolished.

While the cuts are welcome news for workers, the overall tax burden is still rising (partly because income-tax thresholds have been frozen which can pull more people into paying taxes at a higher rate).

It is therefore important to consider taking advantage of tax-efficient ISAs and pensions (such as SIPPs) where appropriate. The cuts to employee NICs will come in time for the end of the tax year on April 5 next year, which is the deadline to invest this year’s ISA and/or pensions allowance to shelter your investments from income or capital-gains tax (CGT).


Notes: All data and examples in this article are sourced from Autumn Statement, HM Treasury, November 2023 and reflect information available at the time of publication.

1 Annual Limits – The government is freezing the limits for Individual Savings Account (£20,000) and Junior Individual Savings Account (£9,000) at their current levels for 2024-25. Section 5.46, Autumn Statement 2023.

2 Vanguard’s ETFs can only be held in whole units and our mutual funds are not listed.

3 This includes the basic State Pension, new State Pension and Pension Credit standard minimum guarantee.

4 HM Revenue & Customs analysis of Nics liabilities. Section 3.7, Autumn Statement, November 2023.

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