Exact date this month millions of Brits set to see more money going into their bank
Millions of Brits are set to see more money go into their bank accounts this month, which is always great to hear during a cost-of-living crisis.
As your salary gets drip fed into your account every month, you'll of course notice just how much of your wage is taxed off.
But due to a new change announced in last month's Spring Budget, some of us will be better off.
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Chancellor Jeremy Hunt set out a range of new financial measures in the House of Commons on 6 March, explaining how the National Insurance (NI) will be slashed by two percent.
This means that around 27 million people in the UK will benefit from the move, which will save the average worker on £35,400 more than £900 a year.
The main rate of self-employed National Insurance will also be trimmed down. So when it comes to the self-employed, their NI tax will be reduced to six percent.
This will save a self-employed worker earning £28,000 around £650 a year.
Now, the main rate of employee National Insurance will be cut from 10 percent to eight percent and this will take place from 6 April, 2024.
However, Money Saving Expert founder Martin Lewis has explained that if you earn between £12,750 and £26,000, or over £60,000, there will be nothing to gain.
"What freezing the threshold does is that it means no matter what you earn, as your earnings increase, a bigger proportion of your earnings goes on tax. And that's how the Chancellor makes money from it," he said.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, warned: “Over time, as the frozen tax thresholds bite, more higher earners will suffer.”
Alice Haine, Personal Finance Analyst at investment platform Bestinvest, added: “If you fear a pay rise or bonus will tip your income into a higher tax band, it could be worth asking your employer about ‘salary sacrifice’.
“Some employers will let their staff reduce their salary or bonus payments in lieu of increased pension contributions.
“There is also no increase to the personal savings allowance, which has remained the same since 2016, putting people at risk of paying tax on the interest they earn on their nest eggs.”
Also, from 1 April, 2024, workers aged 21 and over will be entitled to the National Living Wage.
From April, the main minimum wage rate will rise to £11.44 and be extended to those aged 21 and 22.
It has previously been £10.42 for those aged 23 and over and £10.18 for workers aged 21 and 22.
Kate Smith, Head of Pensions at Aegon, said the wage increase 'is good news for workers on the National Living Wage for the very obvious reason that it boosts pay packets, but the hidden benefit is that it will also have a positive impact on workplace pension contributions'.
Anish Vij