Budget at a glance: Average worker set to save £450 a year

The Chancellor announced his March statement to the Commons today, setting out the likes of  Government’s tax and spend plans. 

Mr Hunt’s headline announcement was a 2p cut to national insurance, matching a reduction announced in the autumn statement last November. 

The cut in national insurance from 10% to 8% could save the average worker £450 a year and £350 for self-employed, adding up to a £900 saving for 27 million employees when combined with a cut last autumn.

Mr Hunt said: “That means the average earner in the UK now has the lowest effective personal tax rate since 1975  and one that is lower than in America, France, Germany or any G7 country.”

But the changes come against a backdrop of frozen thresholds which will see more people dragged into tax or higher brackets as their earnings rise. Senior Tories have criticised the move. 

Mr Hunt also revealed duty freezes on fuel and alcohol, which he said he would maintain the 5p cut and freeze fuel duty for a further 12 months.

This is expected to save the average car driver £50 next year and bring total savings since the 5p cut was introduced to around £250.

An alcohol duty freeze will also continue until February 2025, with the Chancellor claiming this would help 38,000 pubs across the UK.

The two duty freezes are expected to help reduce headline inflation by 0.2 percentage points in 2024-25.

The alcohol industry has welcomed the extension of the alcohol duty freeze as “some much-needed certainty and stability” for the industry and consumers alike.

Mr Hunt said: “I have listened carefully to my Right Honourable Friends for Altrincham and Sale West, the Vale of Glamorgan and my Right Honourable Friend from Moray who is a formidable champion of the Scottish Whisky industry.

“I also listened to councillor John Tonks, a strong supporter of the wonderful Admiral pub in Ash, who pointed out the pressures facing the industry. So today I have decided to extend the alcohol duty freeze until February 2025.

"The Chancellor has raised the spirits of distillers, hospitality businesses and consumers alike"

Stephen Russell, UK Spirits Alliance added: “This benefits 38,000 pubs all across the UK – and on top of the £13,000 saving a typical pub will get from the 75% business rates discount I announced in the autumn.

“We value our hospitality industry and we are backing the great British pub.”

The Chancellor also announced that an excise duty will be introduced on vapes from October 2026, alongside a one-off increase in tobacco duty and a one-off adjustment to rates of air passenger duty on non-economy flights.

However, he said that, because vapes “play a positive role” in helping smokers quit, there will also be a one-off increase in tobacco duty to ensure vaping remains cheaper than smoking.

Oil and gas windfall tax has also been extended until 2029, with the aim of raising £1.5 billion in tax.

Mr Hunt also said that planned growth in day-to-day public spending will be kept at 1% in real terms - which includes an NHS productivity plan costing £3.4 billion which will be fully funded with the aim of improving the health services IT systems to free up the time of doctors and nurses.

Mr Hunt also announced that the government will guarantee pay rates to childcare providers for the next two years, in order to deliver on its care offer for children over nine months old. The package is aimed at getting more working age parents back into work while they juggle caring responsibilities.

Other mentions in the budget included The VAT registration threshold which will be increased from £85,000 to £90,000 from the start of April, and the British ISA new savings account will allow an additional £5,000 investment in UK-based companies and assets.