The Government’s new National Insurance plan means the average Herefordshire worker will be paying less per year from July, figures suggest.
Nearly 30 million UK workers will see their taxes cut following Chancellor Rishi Sunak’s raising of the NI earnings threshold, though a think tank said over 1 million Britons will be on the verge of 'absolute poverty' due to the rising cost of living.
Figures from the Office for National Statistics show that the median salary for full-time workers living in Herefordshire was £29,258 in 2021.
Currently, employees pay National Insurance on 12 per cent of their annual earnings over £9,568, meaning a worker on this wage would pay £2,363, around £197 per month.
It was previously announced that NI rates will rise to 13.25 per cent for one year from April 6, to raise funds which will be ring-fenced for health and social care.
However, the Resolution Foundation said the 'big but poorly targeted policy package' little to aid the families who have been hit the hardest by the cost-of-living crisis. It estimates that 1.3 million Britons are set to fall below the poverty line next year, including 500,000 children, the first time Britain has seen such a rise outside of a recession.
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“Rishi Sunak has prioritised rebuilding his tax-cutting credentials over supporting the low-to-middle-income households who will be hardest hit from the surging cost of living, while also leaving himself fiscal flexibility in the years ahead. Whether that will be sustainable in the face of huge income falls to come remains to be seen.”
Resolution Foundation chief executive Torsten Bell
Mr Sunak said that over the last 10 years, the number of people living in poverty has declined by about 1.3 million people. As part of a raft of measures introduced in his spring statement, Mr Sunak also announced that the Household Support Fund will rise to £1 billion from April "to do more to help our most vulnerable households with rising costs."
In October, £421 million was distributed to allow councils to help vulnerable households in their area with essentials over the winter, with Herefordshire receiving £1,329,602 of the pot.