Martin Lewis has given his first reaction to Rishi Sunak's spring statement to MPs. The money saving expert said the Chancellor's change to the national insurance threshold was 'the big one' in a statement that also cut fuel duty and signalled a cut in income tax ahead of the next General Election.
Speaking to Nihal Arthanayake on BBC Radio 5 Live, Martin said there was some relief for households facing a cost of living crisis. He has previously said money management will not be enough to help people, the Government needed to help people.
Martin told listeners: "I think there is some mitigation here for the cost of living crisis. There is some relief.
"I would have liked to see more, but I was expecting less. So I'm not quite sure how I grade it on that basis."
He added: "I think the big one here is the change to the national insurance threshold. That is absolutely the big change here."
He said people knew there was going to be a 1.25 percentage point increase to national insurance rates coming in April. And he said this is a tax on income.
He added: "We knew that was coming and if you bake that in, that is a big hit at the moment. And people like me have been saying for a while, look, if you're going to have to do that at least protect people at the lower end of the income scale.
"What he has done today is quite a substantial change. Right now, you start to pay national insurance on income above £9,600-ish. But you don't start to pay income tax until your income hits £12,600-ish.
"From July, those two thresholds are equalled so there's an extra £3,000 of income you won't pay national insurance on."
He said the total gain from that change in isolation is £360 for everyone who earns over the new threshold. But he said this change cannot be taken in isolation as there is the 1.25 percentage point increase in NI rate in April.
It looks like the break-even point is £35,000, he told the BBC.
He said: "From July, if you earn £35,000 or less, you will pay less national insurance than you do currently on the same income. It could be for those at the much lower end of the scale, it could be a good few hundred pounds. If you earn £35,000 or more, you will pay more national insurance than you do currently."
He said that is a help and those earning up to £20,000 a year, it is something to partially offset the energy price rise. He also said the 5p cut in fuel will help motorists and the VAT gain for energy efficiency measures would provide some help as well.
