MORE than 30million people will see their income tax bill slashed from today – with basic rate taxpayers getting a £130 windfall.
The tax-free personal allowance has been increased to £12,500 – up from £11,850.
More than 30million people will see their income bills slashed as the tax-free personal allowance has increased[/caption]
And the higher rate threshold to £50,000 – giving middle class households a £495 tax cut.
But at the same time households are facing an average £76 hike in council tax this year.
Meanwhile 1.8million low-income workers will benefit from a 38p per hour rise with the National Living Wage going up from £7.83 to £8.21.
A full-time worker on the National Living Wage will earn an extra £690 over a year.
The National Minimum Wage has also been increased, to £7.70 per hour for 21 to 24-year-olds and £6.15 per hour for 18 to 20-year-olds.
Taken together with the National Living Wage, 2.1 million people are set to get a pay rise, the Treasury said.
The Treasury said a fuel duty freeze for the ninth year in a row and increases to work allowances in Universal Credit will go towards helping families with the cost of living.
People saving into a workplace pension who are only paying in the minimum amount allowed will see more money going out of their pay packets as minimum contributions have increased from April 6.
Ten million people have already been automatically enrolled into workplace pensions.
A total minimum contribution of 8 per cent of qualifying earnings must be paid into pension pots, of which employers must contribute at least 3 per cent, with the remaining 5 per cent made up by staff.
Previously, total minimum contributions were set at 5 per cent.
Hargreaves Lansdown calculates the increase could mean an average worker sees an extra £30 leave their April pay packet to cover the cost of pension contributions.
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But while this may put an added squeeze on incomes, in the longer term the move could make employees much better off.
Hargreaves Lansdown calculates the rise could mean an extra £55,000 sitting in a 22-year-old’s pension pot by the time they retire.
Financial Secretary to the Treasury Mel Stride said: “Our Budget was unashamedly for the strivers and the workers who keep the country going.”
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