What does Chancellor Rishi Sunak’s budget statement mean to me?

Chancellor Rishi Sunak delivered his spring statement on Wednesday amid a cost-of-living crisis and war in Ukraine.

With fuel and utility prices rising rapidly, Sunak was asked to help people facing unsustainable living costs.

What impact will his ads have on people’s pockets?

national insurance

The Chancellor has announced that the National Insurance payment threshold will be increased by £3,000.

People will be able to earn up to £12,570 before paying National Insurance income tax.

This will save workers across the country £330 – a tax cut for around 2.4 million Scots.

However, from April, National Insurance contributions will increase by 1.25 percentage points.

Reduction of fuel taxes

Sunak has announced a temporary duty reduction of 5 pence per litre, which will last for 12 months until March next year.

Oil prices soared after Russia invaded Ukraine, with costs for motorists reaching record highs at the pumps.

Fuel tax has been frozen by the UK government for 11 years, it currently costs 58 pence per liter for petrol and diesel, while a 20% VAT is applied on top.

The tax represents more than a third of the price of a liter of gasoline.

According to the RAC, a 5p reduction will make it £3.30 cheaper to refuel a typical family car with a 55 liter tank.

The Chancellor said the reduction would save the typical driver £100.

Energy bills

From April 1, the energy price cap will increase by 54%.

A typical household is expected to see costs rise to £1,971 per year.

Sunak announced last month that all households will get a £200 cut on bills from October.

However, this will have to be repaid in four instalments starting next year when energy prices are supposedly expected to drop.

On Wednesday, Sunak said VAT will be waived on energy efficiency measures such as solar panels, heat pumps and insulation installed for five years.

Dorothy H. Lewis