Nearly 30 million UK workers will see their taxes cut following Chancellor Rishi Sunak's raising of the NI earnings threshold, although a think tank said more than a 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 Mansfield was £27,099 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 £2,104, about £175 per month.
It was previously announced NI rates will rise to 13.25 per cent for a year from April 6, to raise funds for health and social care.
This means the average full-time Mansfield worker will pay £18 more for a few months.
But in his spring statement, Mr Sunak announced the earnings threshold will rise to £12,570 from July to mitigate the increasing cost of living, meaning a Mansfield worker earning the median salary for the area will pay £179 less per year than they do now, £1,925.
The median salary in Ashfield last year was £27,366, meaning workers were paying about £178 a month in NI, which will increase by £19 for a few months.
The threshold change means the average Ashfield worker will pay £175 less per year than they do now – £1,960.
This is compared with £2,205 across the East Midlands as a whole, where the median salary for full-time employees is £29,212.
Mr Sunak said it was ‘a £6 billion personal tax cut for 30m people, a cut for employees worth more than £330 a year’.
Further measures include a 5p cut in fuel duty and a pledge to cut the basic rate of income tax from 20p in the pound to 19p in 2024.
However, the Resolution Foundation said the ‘big but poorly targeted package’ does not do enough to aid families hit the hardest by the cost-of-living crisis.
Torsten Bell, foundation chief executive, said: “Mr 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.”