What Rishi Sunak’s Spring Statement means for you

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Rishi Sunak made a string of eye-catching announcements in his Spring Statement, not least that the National Insurance threshold will rise by £3,000 in July, meaning workers can earn £12,570 without paying the tax.

However, none of his policies take away from the fact that families face the biggest hit to their living standards on record as the tax burden rises to its highest level in 70 years amid surging inflation and a hike in National Insurance.

Taxes will account for more than 36pc of GDP, up from 33pc before Covid, representing the fastest jump in the burden in a generation and taking the Treasury’s haul to its highest level since the late 1940s.

At the same time households will suffer the biggest drop to their spending power on record as they are beset by tax rises and surging inflation.

Work out what your take home pay will be following the changes.

Before we get into the analysis and detail on the Chancellor’s statement, here are the three essential pieces you need to read:

Mr Sunak faced criticism from Tory MPs after he decided to stick to his plan of hiking National Insurance next month.

The Chancellor confirmed a National Insurance tax increase to generate £12billion for the NHS and social care will still go ahead.

Yet he also vowed to cut the basic rate of income tax from 20p to 19p in the pound before the next election.

He said the tax cut would cost £5bn and benefit 30m people.

That has not impressed the boss of the Institute for Fiscal Studies.

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‘Is that it?’

“Is that it?” came the cry from the Labor front benches halfway through Mr Sunak’s speech.

It is likely to be the question asked by many hard-pressed families struggling to cope with the worst cost of living crisis in a generation.

Of course, the Spring Statement is not supposed to be a full fiscal event like the Budget but Ben Wright says it indicated that the Chancellor is more concerned about debt than the cost of living crisis or our growing tax burden.

It is strange to think that two years ago this was the Chancellor who gave us furlough and although his policies will help people in the future, isabel fraser says help is needed right now.

Janet Daley warns that Mr Sunak is creating a new Brownite poverty trap while former Treasury official James Dowling outlines why the Chancellor did what he could in the face of unprecedented challenges.

Cut the cost of living

In the face of the anxiety-inducing cost of living price hikes, more and more of us who have returned to the office are preparing thrifty lunch box meals. Major budget items such as fuel prices may be out of our control.

But “the grocery budget is one of the few places where we can reduce costs,” says Lesley Negus, a frugal cookery blogger.

Read how to make lunch (with coffee) every day for £10 a week.

As the cost of living crisis bites, many are preparing to protect themselves from price shocks in the future.

Have you identified ways to make your money hold or increase its value over the long term?

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Email your thoughts in fewer than 100 words to [email protected] and we will share the best.

Put “Inflation tips” as the subject and leave your name, age and hometown.

Evening briefing: Today’s other essential headlines

Comment and analysis

Around the world: Taliban stops girls going to school

Afghan girls have been left in tears after the Taliban backtracked on a promise to let female students return to secondary schools on Wednesday, citing a dispute over uniforms. Hours after classrooms had reopened for the first time in seven months, the Taliban published a notice saying schools would remain shut for girls. The statement said schools would only reopen once a decision was made in accordance with “Sharia law and Afghan tradition” over uniforms for girls. Read how many female students have reacted angrily to the closures.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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