£400 a year worse off

Tax plans will deliver £400 income hit

The average working household in the UK is projected to be £400 worse off this year due to a combination of factors, including a freeze on the income tax threshold and increased National Insurance contributions for employers. Analysis by the Resolution Foundation warns that the poorest half of the workforce could see a 3% decline in disposable income over the next five years, equating to about £500 per household. The think-tank highlighted that a freeze on personal tax thresholds would push more earners into higher bands and a hike in employer National Insurance is set to stifle wage growth. Adam Corlett from the Resolution Foundation said: "The new tax year has arrived, and brings with it higher taxes, even larger bill increases, and benefits that aren't keeping pace with the rising cost of living." Rising utility bills and council tax increases further exacerbate the financial strain on households, with many local authorities raising council tax by the maximum allowed.