How much will the 2p National Insurance cut save me?

The starting rate for NI will change from 10% to 8%, for 27 million workers, from April 2024. Chancellor Jeremy Hunt says this is worth £450 a year to an employee on an average salary of £35,000. He is also cutting NI for two million self-employed workers. Their rate will fall from 8% to 6%.

NI on income and profits above £50,270 remains at 2%. It is not paid by people over state pension age, even if they are working. The government says that when combined with the latest cut, a worker on £35,000 will save £900 a year. The tax-free personal allowance - the amount you can earn every year before you have to pay income tax - has been frozen at £12,570 until 2028.

Higher-rate tax will continue to kick in for earnings above £50,270. Freezing the thresholds means that more people start paying tax and NI as their wages increase, and more people pay higher rates. Once you earn more than £100,000, you also start losing your tax-free personal allowance. You lose £1 of your personal allowance for every £2 that your income goes above £100k.

The higher rate is 40%, and is paid on earnings between £50,271 and £125,140. For the poorest fifth of households, VAT is the biggest single tax paid. The UK is right in the middle of the G7 group of big economies. France, Italy and Germany tax more; Canada, Japan and the US tax less.

However, overall taxation in the UK is high compared with historical rates. You can email us at HaveYourSay@bbc. co. uk.

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