'More Tommy Cooper than Dynamo': Sarah Coles looks behind the curtain at Chancellor's Autumn Statement

For those struggling under the heaviest tax burden since the Second World War, this will ease things slightly. It will take £149 off the tax bill of someone earning £20,000, save £349 for someone making £30,000, £549 for someone making £40,000, £749 for someone making £50,000 and £754 for anyone earning over the higher rate tax threshold.

Runner up in the list of popular income boosts was the National Living Wage, which will rise to £11.44 an hour – up almost 10 per cent from £10.42. It’s the biggest ever rise in the National Living Wage – up £1,800 a year for a full-time worker.

The age threshold has also been cut from 23 to 21, which will offer 21-year-olds and 22-year-olds, a real step up in income.

For pensioners, the other piece of good news was confirmation that the state pension will rise in line with the rules of the triple lock in April – at 8.5 per cent. For someone on the full new state pension this will see their pension grow from £203.85 to £221.20 a week.

For someone who hit state pension age before 2016 their full weekly basic state pension will rise from £156.20 to £169.50. In the run up to the Statement, there had been concerns that the Treasury would find a way of fudging the figures in order to bring in a lower rise, so this will be a huge relief for anyone who is reliant on the state pension.

So far, so good. However, like any magician worth his salt, the Chancellor had his smoke and mirrors out for the speech, heavily emphasising the positive. If you look behind the curtain – in the Office for Budget Responsibility report – the stark reality stares you in the face.

The National Insurance cut isn’t to be sniffed at, but it’s a drop in the ocean compared to the waves of tax rises we’ll see as a result of the frozen tax thresholds.

The Office for Budget Responsibility says the tax burden will rise every year to the end of the forecast in April 2029 – hitting 37.7 per cent of GDP.

And it’s not just existing taxpayers paying more, by the April 2029 there will be 4 million more people paying income tax, 3 million more paying the higher rate and 400,000 more paying the additional rate.

This is a massive step change in the scale of tax, which will leave us all worse off.

The other tax horror that didn’t merit a mention was inheritance tax. The OBR calculated that higher house prices and frozen thresholds will mean we fork out a record £7.6 billion in IHT this year. It’s likely to stay around this level for the following two years, and then pick up again.

By 2026/7 it’s expected to hit £8.2 billion and by 2028/29 it’s forecast to be £9.8 billion. These huge rises will drag far more people into paying this tax – and paying more of it too. Unless there’s movement on the thresholds announced in the spring Budget, the days when this was just a tax for very wealthy people to worry may well be numbered.

Thanks in part to higher taxes, we’re facing the biggest fall in living standards since records began in the 1950s – down 3.5 per cent from pre-pandemic levels. We’re currently living through the worst of it – with living standards expected to drop 2.2 per cent this tax year and 0.8 per cent in the next tax year. It’s no wonder we’re all being forced to make horrible spending cuts to stay afloat.

Your living standards are likely to drop if even you’re in work, but the risks of you losing your job are higher too.

There are going to be more job losses than the OBR expected back in March, with 1.6 million people out of work at the peak in the spring of 2025 – around 4.6 per cent of the labour market.

Standards of living have also been hit by runaway inflation, and the OBR has decided that rising prices are going to be a problem for an entire year longer than it expected back in March - only getting back to the 2 per cent target by 2025.

This, in turn will mean interest rates are likely to stay higher.

By 2028/29 it’s expecting them to be stuck at 4 per cent.

This will mean no end in sight for mortgage misery, which is going to mean impossible challenges for anyone coming up for a remortgage.

The average interest rate on existing mortgages is expected to fall from a low of 2 per cent in 2021 to 5 per cent in 2027 – which is 2.2 per cent above the average of the previous decade. This is already taking a toll on the property market, and is only going to get worse.

House sales have fallen to their lowest level since the middle of the pandemic and the OBR expects them to fall another 6.9 per cent in 2024. House prices, meanwhile, are expected to cling to growth this year, before falling a painful 4.7 per cent in 2024.

The average house price is expected to bottom out at £266,000 at the end of 2024, and from peak to trough this would be a drop of 7.6 per cent.

The OBR expects it to take five years before they get back to 2022 levels.

In reality the good news is horribly thin on the ground, and as all this unfolds in the coming months and years, it’s going to take a David Blaine-style epic illusion from stopping the miserable reality becoming all too obvious.

Savings loyalty penalty

The savings loyalty penalty has almost doubled in a year. There’s £257.8 billion languishing in accounts paying no interest at all – missing out on £13.6 billion a year in interest.

This is up from £7.4 billion last October, because rates have risen so much in the interim.

Last October, the best easy access savings accounts were paying less than 3 per cent, whereas now they’re paying more than 5 per cent. It means the rewards for switching are much higher – and the price we pay for staying put has ballooned.

As a result, the penalty has risen dramatically, despite the fact the cost-of-living crisis has forced us to spend our way through a chunk of our savings.