National Insurance cut: Martin Lewis explains who is better and worse off

Martin Lewis has explained how the latest national insurance cut will affect workers on different wages.

It comes after Chancellor Jeremy Hunt confirmed that the rate of national insurance will be cut by 2 per cent, going from 10 per cent to 8 per cent. Meanwhile, self-employed workers will see a cut on their rates from 8 per cent to 6 per cent.

Mr Hunt claims that the average employee will see an additional £450 a year from the scheme while self-employed people will see an additional £350. He added that when combined with the cut in January, around 27 millions employees will see a cut of £900 a year.

Read more: 10 key announcements made in Spring Budget 2024 and how they will impact you

However, there are a wide range of tax bands which means workers will see different changes to their income from April 6. In a video posted to X, formerly Twitter, Martin explains: "I'm going to split this into employees and self-employees.

"Employees were paying 12 per cent before the 6th of January, then it dropped to 10 per cent and from the 6th of April, it will drop to 8 per cent. So that is a total 4 per cent cut and the new announcement is a 2 per cent cut today.

"That is on the national insurance that you pay on earnings between £12,570 and £50,270 - so a very simple easy way to think about this - for each £10 grand you earn above £12,500, you gain £200. So if you earn £22,500, you gain £200, £32,500, you gain £400, £42,500, you gain £600 and if you earn the maximum £50,270 then you're gaining around £750 in total..."

He then examines how people will be affected due to the frozen tax threshold which has remained frozen following today's Spring Budget. This is a concern as people's wages may increase alongside inflation which