{"id":524721,"date":"2024-03-06T13:35:58","date_gmt":"2024-03-06T13:35:58","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=524721"},"modified":"2025-04-15T09:20:46","modified_gmt":"2025-04-15T08:20:46","slug":"spring-budget-2024","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/budgeting\/spring-budget-2024","title":{"rendered":"Spring Budget 2024: How to boost your finances with the new changes"},"content":{"rendered":"

The chancellor’s latest 2p cut on national insurance gives workers around an extra \u00a3450 a year starting from 6 April. Combined with January’s 2p cut, announced last autumn, the average worker should save around \u00a3900 a year in national insurance.<\/p>

The figure is based on someone earning \u00a335,400, which the government said was the average salary last November.<\/p>

There are several ways you could use this giveaway to boost your finances, from paying off debt to turning it into \u00a31,136 in time for your summer holiday in 2025. For a holiday savings pot, it will help to ring-fence it from your normal spending by setting up a standing order to another account as soon as your salary’s paid.<\/p>

4 ways to use the extra \u00a3900<\/h3>
  1. Cut your debt.<\/strong> Before you consider saving or investing money, the priority is to pay off debt on credit cards and loans, to get your finances into better shape so you’re not paying interest. To give yourself some breathing space on credit card debt, it’s worth considering a balance transfer credit card<\/a> – our full guide compares these deals and you can check which cards you’re eligible for with our free checker<\/a> that doesn’t affect your credit score. The key is to pay off your balance before the 0% period finishes.<\/li>
  2. Switch your bank account and ring-fence the savings.<\/strong> If you took advantage of the current switching deal<\/a> from NatWest, you’d get a \u00a3200 switching bonus plus access to a savings account paying 6.17% AER, which is a pretty decent rate. If you drip feed the bonus plus the extra \u00a375 a month from national insurance savings into this high-earning savings account, you’d be saving \u00a392 a month and have \u00a31,136 in a year.<\/li>
  3. Invest it with a stocks and shares ISA.<\/strong> From 6 April, the tax-free allowance on capital gains will halve to \u00a33,000 a year. So it’s more important than ever to take advantage of tax-free ISAs if you plan to invest. Historically, stock markets have tended to give a better return than cash savings over long periods of time, so you could consider an exchange-traded fund that tracks global stock markets. Our guide on how to buy shares<\/a> explains more about what to consider.<\/li>
  4. Top up your pension.<\/strong> If you don’t need the cash you’re saving straight away, consider topping up your pension as this could be worth much more when you eventually retire. The wealth manager Evelyn Partners says a 25-year-old earning \u00a335,000 could be nearly \u00a380,000 better off by age 67 if they paid the (roughly) \u00a337 a month saved with the latest NI cut straight into their pension monthly.<\/li><\/ol>

    How much will you save on national insurance?<\/h3>
    Salary (\u00a3)<\/th>12% NI (\u00a3)<\/th>Saving with 8% NI, from 6 April, 2024 (\u00a3)<\/th><\/tr><\/thead>
    30,000<\/th>2,091.60<\/td>697.20<\/td><\/tr>
    34,963<\/th>2,687.16<\/td>895.72<\/td><\/tr>
    40,000<\/th>3,291.60<\/td>1,097.20<\/td><\/tr>
    50,000<\/th>4,491.60<\/td>1,497.20<\/td><\/tr><\/tbody><\/table>

    Table source: Quilter <\/p>

    While the cut in national insurance will be welcomed by many workers, the downside is that the chancellor did nothing to tackle income tax bands, which haven’t been rising in line with wage increases. According to the Institute for Fiscal Studies think tank, about half of employees \u2013 the 14 million earning between about \u00a326,000 and \u00a360,000 a year \u2013 will be better off from the latest changes but any other employees earning enough to pay national insurance or income tax will be worse off, because the cuts to national insurance “are more than offset by other tax rises”.<\/p>

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    A huge issue for UK workers is the thresholds at which they start paying income tax, and pay it at a higher rate. These thresholds haven’t changed since the government froze them in 2021 – even though we’ve had huge increases in inflation and wages have risen. So more people are paying tax, or paying it at a higher rate, even though their money has less spending power. And the freeze is due to last until 2028. The chancellor has shied away from dealing with this stealth tax.\u201d<\/p>\n