Budget  

What advisers can expect from Friday's mini-budget

This has saved the exchequer around £5bn a year, but has meant that state pensions have seen their benefits rise by 3.1 per cent, compared with price rises that have hit 10 per cent this summer.

Under triple lock, the state pension is increased by the highest of earnings growth, price inflation or 2.5 per cent a year.

Truss has since said she is “fully committed” to the triple lock, and at a hustings event last month, she said she will raise pensions next year by 9-10 per cent.

The inflation part of the lock is calculated from the September inflation figure, which is over 10 per cent.

This would increase pensions from £185.15 per week to £203.65, or £10,600 a year, according to AJ Bell’s head of retirement policy, Tom Selby.

“It would likely cost the Treasury over £10bn a hefty price tag even in the context of the huge government support packages we have seen in recent years,” he said.

Balancing act

The government has a tricky balancing act of helping consumers through the cost of living crisis without adding fuel to the inflation fire, while trying to reinvigorate the UK economy, said Myron Jobson, senior personal finance analyst at Interactive Investor.

“The concern is the need to address swelling public debt after the colossal spend on Covid and cost-of-living support measures has been kicked the into the long grass.”

The highest earners could be in line for the biggest savings if the the higher income band threshold is raised, Jobson said. 

Amount saved from potential tax policies

Earnings

£20,000

£30,000

£50,000

£80,000

£100,000

NI saved with 1.25% reduction

£93

£218

£468

£843

£1,093

Income tax saved with 1% cut

£74

£174

£374

£674

£874

Total savings

£167

£392

£842

£1,517

£1,967

Total savings (including rise in higher rate income tax threshold to £80k)

£167

£392

£842

£7,463

£7,913

 Source: Interactive Investor

Figures from II show that those earning £100,000 would enjoy total savings of nearly £8,000 if the national insurance rise in cancelled and the income tax threshold raised.

Those on £30,000 would save nearly £400 in comparison, with those on £20,000 saving just £167 per year.

OBR

The Treasury Committee today (September 20) urged the Treasury for a second time to release a forecast by the Office for Budget Responsibility with the budget.

Last month, chair of the committee, Mel Stride, asked then-chancellor Nadhim Zahawi, to confirm if the Treasury had begun working with the OBR, and warned him against "flying blind".

OBR economic forecasts are normally released alongside budgets, with the government body normally requiring 10 weeks' notice.

However, given the severe economic uncertainty facing the UK’s economy, the OBR has previously said it is ready to provide forecasts for the budget on Friday.

sally.hickey@ft.com