Mini-budget 2022: what it means for you | Mini-budget 2022

Single, 25

Unemployed

2022/23 She receives a universal credit payment of £335 a month, which adds up to £4,019 over the year. Financial assistance with housing costs depends on the property and where it is rented. She will also receive cost of living payments worth a total of £650.

2023/24 The benefit increase will be based on September’s inflation figure; however, the government says UC claimants working less than 15 hours a week have to show they are trying to get more work or risk having their payments cut.


Single

Earns £34,000

Illustration of single man

2022/23 He pays £4,284 a year in income tax while his national insurance (NI) bill is £2,839. This results in a monthly pay packet of £2,240 per month.

November 2022 The cancellation of the 1.25-percentage point increase in NI contributions means he will be £22 a month better off.

2023/24 The reduction of the basic rate of income tax from 20% to 19% will lower his tax bill by £214 while the NI change adds up to £268, leaving him £482 better off.


Single, one child

Earns £6,916 working part-time (14 hours a week) on minimum wage

Illustration of single mum with child

2022/23 Her low earnings mean she does not qualify for income tax or national insurance, taking home £576 a month. This is topped up by a £623 universal credit payment plus £87 child benefit. She will also receive the £650 of cost of living payments.

2023/24 She will get a pay rise when the minimum wage (currently £9.50 an hour) goes up. However she currently works less than 15 hours a week so will be under pressure to do more or see her UC payments cut.


Unmarried couple in their 30s, no kids

First income £55,000, second income of £35,000

Illustration of unmarried couple

2022/23 Our couple has a combined annual income tax and national insurance bill of £22,034. This results in a combined monthly income of £5,664.

November 2022 The NI change means they will be £68 a month better off.

2023/24 The income tax changes are worth £601 while the reduction in their NI bill is £811, leaving them £1,412 better off.


Unmarried couple, two children, one of whom has a disability

First income £23,000, second income £5,928

Illustration of unmarried couple with two children, one with disability

2022/23 Our couple has a combined income tax and national insurance bill of £3,466. Their monthly take home pay of £2,122 is supplemented with a universal credit payment of £623 plus £145 of child benefit. They will also get the £800 in cost of living payments.

November 2022 The NI change is worth £11; however, they will only be up £5 a month because their UC will be adjusted.

2023/24 The cut to the basic tax rate is worth £104 per year while the NI change adds up to £130. However, their annual UC will be reduced by about £120 due to their higher pay. The upshot is an extra £114 in their pocket.


Married couple, three children

One income of £57,000

2022/23 The breadwinner pays £9,976 a year in income tax and £5,214 in national insurance. This translates into a monthly income of £3,484 plus £61 child benefit.

November 2022 The NI change means they are up to £46 a month.

2023/24 The income tax changes are worth £364 while the NI cut is worth a total of £555 meaning they are £919 better off.


Married couple, two children

Both unemployed, one is a full-time carer

Illustration of married couple with two children

2022/23 The wife is a full-time carer for her disabled husband so they get a monthly universal credit payment of £1,583 plus £145 child benefit. They are entitled to £800 worth of cost of living payments.

2023/24 Their finances will benefit from the uprating of benefits, but otherwise there was nothing in this budget to help them. The government has not said whether cost of living payments will be repeated next year.


Married couple

First income £200,000, second income £100,000

Illustration of married couple

2022/23 Our high fliers pay a hefty £102,388 a year in income tax and £16,473 in national insurance. This results in a combined monthly income of £15,095.

November 2022 The NI change means they are up to £286 a month.

2023/24 Our rich couple are a lot richer. The income tax changes, including axing the 45% top rate on earnings over £150,000, is worth £3,254 while the NI reduction is worth £3,436, meaning they are £6,690 better off.


Single pensioner

Basic state pension

Illustration of single pensioner

2022/23 Her state pension is £141.85 per week or £567 per month. She also gets the pension credit top-up worth another £163. She will also receive £950 in cost of living payments.

2023/24 She doesn’t benefit from any of the tax changes announced. However, the state pension is subject to the “triple lock”, which means that it will rise by the highest of three possible figures: inflation (in September), average earnings or 2.5% in April.


Married pensioners, both in their 70s

State pension plus private pension of £8,000

Illustration of married pensioners

2022/23 Their combined pensions result in a monthly income of £1,624. Due to their private pension they pay £307 a year income tax. They will receive the pensioner cost of living payment worth £300.

2023/24 They will benefit from the annual rise in the state pension while the income tax change leaves them £15 better off.

Leave a Reply

Your email address will not be published.

Back to top button
THE-NEWS-PAGE