Spring statement 2022: what it means for you

theguardian.com:

Rishi Sunak’s spring statement included several measures designed to help UK households cope with the rising cost of living.

According to the Office for Budget Responsibility, despite the measures real household disposable incomes are set to fall by 2.2% in 2022/23 – the largest drop in a single financial year since records began in 1956-57.

It says policy measures announced in October will “offset a third of the overall fall in living standards that would otherwise have occurred in the coming 12 months”.

Here’s what the spring statement announcements will mean for your finances.

To help low-income workers take home more of their pay, the chancellor said that the level at which national insurance contributions (Nics) start to be charged will rise from its current level of £9,880. From July, workers will not make NI contributions until they earn £12,570 a year – the same level that income tax starts to be chargedFor some earners the change will cancel out the NI surcharge that will come into effect in April. Figures from accountancy firm Blick Rothenberg show that those earning up to £41,389 will be better off from July than they are in the current tax year, although they will see pay dip before then.

According to Blick Rothenberg, the maximum that bills will be cut by as a result of the change in the Nics threshold will be about £330.

The table below shows what the two changes mean for different salaries.

The Institute for Fiscal Studies says: “Bringing together the expected changes in earnings, the reforms to taxes, and the energy measures announced in February, a median (middle) earner on £27,500 a year can expect to be about £360 worse off this year than they were last.

“A full-time worker on the national living wage fares a