Martin Lewis has warned that some people are set to be worse off after Rishi Sunak’s National insurance announcement during Spring Statement.
Mr Sunak set out several new measures intended to help slow inflation, which is currently at a 30-year-high of 6.2 percent.
The measures included a 5p per litre cut to fuel duty, a £3,000 increase to National Insurance and an abolishment of VAT on energy efficient materials.
Martin Lewis
Twitter/Martin Lewis
Rishi Sunak speaking in the House of Commons on Wednesday
GB News
And while Mr Lewis believes the changes to National Insurance are “sensible”, he has warned that those earning a higher salary will end up paying more money than before.
Posting a video on Twitter, he explained: “It was pre-announced, and it’s been highly contentious that National Insurance is due to rise by 1.25 percentage points, which is effectively a tax on income for people.
“That is still in place, but to mitigate what the Chancellor has done is change the threshold in which you start paying it.
“Today, you start paying National Insurance once you earn around £9,600 a year, and you start paying income tax at £12,600 a year. From July these two levels will be at the same rate which is sensible."
The money saving expert added: “Once you do start paying National Insurance because of the 1.25 percentage points extra people are going to pay more.
“From £9,600 all the way to £35,000, you will either not pay any more or will pay less than you do currently.
“If you pay £35,000 of more, the 1.25 percentage points increase outweighs the change in the starting threshold, then you will end up paying more.”
Meanwhile, GB News’ Liam Halligan has hit out at Rishi Sunak’s promise to cut income tax from 20p per pound to 19, adding that it lacks “credibility”.
He said: “With so much uncertainty, he [Rishi Sunak] cannot in my view credibly say that tax cut will happen."