Many households all across the country are preparing for the financial crisis to hit in April as the cost of living continues to rise to record levels. It comes as the Chancellor of the Exchequer announced this week a number of economic decisions laid out in the Spring Budget.
Among these, the threshold for National Insurance contributions will rise to £12,570 which may affect how much you pay in taxes and other bills. Rishi Sunak has defended the package of measures he announced in his spring statement on Wednesday after he had been criticised for not going far enough to those facing falling into poverty due to the rising cost of living.
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But he said he had “always tried to be honest with people”, and said: “I can’t protect them from absolutely everything that we face.” Mr Sunak said he was “anxious” on behalf of the country and said he knew rising financial pressures were “the number one concern that people have right now”.
The Office for National Statistics (ONS) recently revealed that consumer price inflation – a measure of the rate of increase in the price of goods and services – hit 5.4% in December, its highest since 1992. And household budgets are likely to be squeezed further this year with price hikes predicted in various parts of the economy.
We have updated our cost of living calculator to reveal how much more money you may be paying on bills and tax from April to reflect the changes to National Insurance thresholds.
The calculator is based on rate rise for employees from 12 per cent to 13.25 per cent on incomes of £9,880 to £50,270 a year until July and between £12,570 and £50,270 after that to reflect raised threshold, and a rate of 3.25% on anything over that (up from 2 per cent).
For the self-employed, the rate will go up from 9 per cent to 10.25 per cent and from 2 per cent to 3.25 per cent respectively on equivalent profits, plus new weekly payments of £3.15 on profits over £9,880 to July, and the same on profits over £12,570 from then on.
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