Tom Earnshaw
The UK Government has made a huge tax cut that will put hundreds of pounds back in to our pockets every year.
Announcing the cut on Wednesday afternoon (6 March) during the Spring Budget was Chancellor of the Exchequer Jeremy Hunt.
He set out a range of financial measures the Government will look to bring in regarding its finances, with all the changes announced in the House of Commons.
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In what was an expected announcement, Hunt announced that National Insurance (NI) was to be slashed by two pence.
This will put money back in to the pockets of some 27 million people in the United Kingdom.
NI will now fall from 10 percent to 8 percent of your wage every month, which is significant in regards to excess income.
The cut will happen in April 2024.
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Hunt said the move was made despite 'the UK and the UK economy dealing with a financial crisis, a pandemic, and an energy shock caused by war in Europe'.
He said the Government will help families with 'permanent cuts in taxations', saying 'lower taxes mean higher growth'.
Hunt said: "Keeping taxes down matters to Conservatives it never can for Labour. We believe that in a free society the money you earn doesn't belong to the Government, it belongs to you.
"And if we want to encourage hard work, we should let people keep as much of their money as possible. Lower taxed economies have more energy, more dynamism, and more innovation."
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He added: "We need a simpler, fairer tax system that makes work pay. That is why I cut National Insurance contributions last autumn."
All in all, this will put around £450 back in to our pockets if you work for an employer rather than being self-employed; roughly £37.50 extra in every monthly pay packet.
Combined with the 2 percent cut in last year's NI rate, the overall saving in recent years will stand just short of £1,000 per person.
Hunt also announced that the Household Support Fund - which gives local councils the power to help families via food banks, warm hubs and food vouchers - will be extended beyond its current end date of 31 March by another six months.
The Office for Budget Responsibility (OBR) is set to react to the announcement and provide an assessment of government finances over the next five years.
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OBR forecasts on inflation show it falling below 2 percent just a number of months; almost one year earlier than forecast at the end of 2023.