Everyone has probably read or heard a version of the Chancellor’s announcement last week.
The general consensus is that the cost of living is going up at a pace not seen in a while.
A quick look at five areas that will impact most people in some way:
- NI threshold/ “allowance” – similar to the personal allowance, the NI allowance will jump from £9,568 to £12,570 effective July this year. For those earning up to £12,570, you will start saving £30 a month from this July. If you are making £25,000, you will start saving £17 a month from July. If you are on £35,000, not a lot of savings, only £8 a month from July. If you are making £50,000 and above, you will start paying more NI from April. Obviously, the more you earn, the more this will impact you.
- Income tax – the basic rate reduces from 20% to 19% from April 2024. For every £1,000 earned above £12,570, you will save £10. Maximum of £377 if you earn £50,270 and above.
- Pensions – the flip side of this is your pension pot will drop as the pension credit being applied is not at 20% but 19%. Contributions from April 2024 to the pot will drop by circa 1%
- Fuel duty – there is a 5p drop in fuel duty. Bear in mind that duty and VAT make up slightly more than half the cost of a litre of fuel. Filling up a 55 litre tank car with unleaded will save you a mere £3.
- Employment Allowance – This increases from £4,000 to £5,000 from April. Definitely more encouragement to small businesses to employ more folks whilst saving on their employer national insurance bill.
For the full spring statement on gov.uk, click here.
If you have any concerns or questions, do not hesitate to contact me by clicking here.
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