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Chancellor's Budget Unveils 2p NI Cut

Chancellor's Budget Unveils 2p National Insurance Cut

In a recent announcement during the recent Budget, Chancellor Jeremy Hunt revealed a 2p reduction in National Insurance, shaping the landscape of taxation and spending plans. This move is poised to make a notable impact on individual savings and workforce dynamics.

Savings for Average Worker: £450 Annually

The National Insurance cut, specifically designed to benefit the average worker, comes to an annual savings of approximately £450 for those with a £35,000 salary. When combined with the 2p reduction declared in the previous year's Autumn Statement, individuals can expect a substantial total annual saving of £900.

Criticism from Sir Keir Starmer: "Delusion" and a "Last Desperate Act"

Opposition leader Sir Keir Starmer did not mince words, accusing the Conservative government of being in a state of "delusion" and characterising the budget as "the last desperate act of a party that has failed." This criticism adds a political dimension to the aftermath of the Chancellor's announcements.

Key Takeaways from the Chancellor's Announcements

Breaking down the key points from the Chancellor's announcements provides a comprehensive understanding of the implications:

  • National Insurance cut by 2p, lowering the rate from 10% to 8%.
  • Significant savings of £450 per year for individuals earning £35,000 annually.
  • Cumulative impact with the previous Autumn Statement's 2p cut results in an annual saving of £900.
  • Independent estimates suggest the 2p cut will bring an additional 28,000 people into the workforce.
  • The National Insurance cut poses an annual cost of approximately £10 billion for the government.
  • Changes in National Insurance for self-employed individuals, including a reduced rate of 8% on profits and the elimination of Class 2 contributions.

For more information regarding the latest announcement click here 

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