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Money Saving Expert founder Martin Lewis has given his two cents on Jeremy Hunt's Spring Budget that included a 2% tax cut on National Insurance (NI).
Hunt, who has been Chancellor of the Exchequer since 2022, cut NI for the second time in a year, putting hundreds more back in to the pockets of millions.
NI will now sit at 8% from 6 April for some 27 million employees compared to the 12% rate before the start of the year.
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"Lower taxed economies have more energy, more dynamism, and more innovation," Hunt told the House of Commons.
"We need a simpler, fairer tax system that makes work pay. That is why I cut National Insurance contributions last autumn."
He added: "That means the average earner in the UK now has the lowest effective personal tax rate since 1975, and one that is lower than in America, France, Germany or any G7 country."
On average, the NI cut from April will be worth an average £450 for workers and £350 for the self-employed.
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But how much you save will depend on how you work, Lewis said, with it different for employees and self-employed people. And then it will differ depending on your earnings.
In a video on X, he said: "Employees were paying 12% before 6th January, then it dropped to 10% and from 6 April it will drop to 8%.
"That is on the NI you pay between £12,570 and £50,270. So, here's a very simply way to think about this.
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"For every £10,000 you earn above £12,570 you are getting £200. So if you earn £22,570 you're getting £200.
"£32,570, you're getting £400. £42,570, you're getting £600.
"And if you earn the maximum £50,270 then you're gaining around £750 in total. And that gain then carries on for those who earn above that amount."
For the self-employed, Lewis says: "The main class four NI contributions were set to drop from 9% to 8%. They're now going to drop to 6%.
"Also, class two NI contributions, which is the fixed weekly amount of £3.45 that you pay, that's gone. You'll still earn your NI shares don't worry, but that is gone. That is for people who earn above £6,725.
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"If you earn less than that you can still make voluntary contributions towards to get your NI shares because that's quite important towards what state pension you will get in retirement."
As well as cutting NI, Hunt announced that the Government is changing the way child benefit is treated, with the individual earnings threshold at which it is taxed increasing from £50,000 to £60,000 from April, with people getting at least some help until they earn £80,000.
He also announced a vaping tax will come in from October 2026, although the rate currently remains unknown with it set to enter public consultation. A levy on tobacco with also be applied at the same rate to encourage people to vape instead of smoke.
Featured Image Credit: HGL/GC Images/Getty Stock ImagesTopics: Martin Lewis, Money, UK News, Politics