Households up and down the country are set to have an extra £500 in their pockets every year from this week. Millions of families will be £500 better off thanks to a government decision on National insurance (NI) contributions.
NI contributions went up by 1.25 percentage points back in April, which the government said was to help pay for social care and fund the struggling NHS. Most of the measures announced in Kwasi Kwarteng's doomed September mini-budget have been axed.
However, the former chancellor's decision to reverse the April NI increase has been retained with the cancellation of the rise coming into effect on November 6. This means millions of people will have the extra money in their pockets from this week, Wales Online reports.
Read more: Martin Lewis explains how much energy bills could cost from April after predicted 48% rise
The measure will make a big difference to households struggling to cope with the cost of living crisis as well as businesses grappling with huge running costs heading into the winter.
In April, the amount people had to pay went up from 12% to 13.25% on wages between £9,880 a year and £50,270, with the amount paid on earnings over £50,270 going up from 2% to 3.25%, to help pay for NHS backlogs and social care. However, after criticism of a tax rise during a cost of living crisis, the government decided to increase the lower earnings threshold to £12,570 in July which meant workers below that would no longer have to pay NI contributions.
The cancellation of that April increase now means almost 30 million people will be £500 better off on average next year while 20,000 businesses will save an average of almost £10,000. Most employees will start to receive this tax cut directly through payroll between November and February. To get all the latest money-saving news straight to your inbox twice a week sign up here.
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