Poorest to gain just 63p a month from reversing national insurance hike, study warns

Britain’s poorest households will gain just 63p a month from reversing the national insurance hike, a new study says – while people earning more than £100,000 will benefit the

most. Friday’s mini-budget is set to fulfil Liz Truss’s campaign pledge to axe Boris Johnson’s tax increase – designed to rescue the crisis-hit NHS and adult social care –

also raising fears of future funding cuts. But the analysis by the respected Institute for Fiscal Studies (IFS) has underlined the extent to which the move will

overwhelmingly be a boost for richer Britons. The richest tenth of households, earning an average of £108,000, will save £1,800 on their annual tax bill, equivalent to £150

a month, the thinktank says. In stark contrast, the poorest 10 per cent, three million people who on average earn £12,000, will save only £7.66 – only 63p a month, or 14p a

week. Households with the average UK income of £31,400 will save about £20 a month – while those with an income of £55,000 will save about £58 a month, almost three times

that amount. “Reversing the recent NICs [national insurance contributions] rise would tend to benefit richer households more than poorer ones, even as a share of their

income,” said Tom Waters, a senior research economist at the IFS. Tony Wilson, director of the Institute for Employment Studies, told The Times the plans were a “tax

giveaway to relatively high earners” and risked fuelling inflation. “The worry among Bank of England and Treasury officials will be that the move is more inflationary than a

more targeted subsidy or tax cut,” he said.