- Single (Low income)2023–2024 James, 24, receives the minimum wage of £10.42 per hour for working 35 hours per week at a cafe. Accordingly, he gets £18,964 a year, or £364.70 a week. He has £16,950 left over after taxes and his reduced national insurance bill (the lower rate is implemented in January).2024–2025 April will see a $11.44 minimum wage increase, per the Low Pay Commission’s recommendation. As a result, his weekly gross income increases to £400, or £20,820 annually. He receives £18,345 net after tax and the new, reduced NI, which is approximately £1,395 more than the previous year.
- Single ( Lone Parent)2023–2024 Bob works part-time and makes £16,000, which is increased by benefits. Each year, £1,080 is deducted for income tax and national insurance. The weekly child benefit is £24; that’s £1,248 annually. The family earns £80.21 a week in universal credit payments in addition to not paying rent, for a total net income of £20,339 annually.2024–2025 His annual post-tax and NI income rises to £14,990 by £70. The annual increase in child benefit and universal credit is £1,332 and £4,954, respectively. Even though they are struggling with higher food bills, they are still £949 better off annually overall.
- Average earner2023–2024 Helen makes £38,000 a year, the UK average (median) wage, plus £5,086 in income tax and £2,924 in national insurance. After taxes, her take-home pay is £2,499 per month, or £29,990 annually.
2024–2025 Her employer has increased her salary by £2,500. Her tax liability thus increases to £5,586 while she also pays a £2,793 NI bill. Her net annual income has increased by £2,131 after a £2,500 gross pay increase.
- Married couple with two children (Both unemployed)2023–2024 Peter and James are now dependent on benefits after being laid off recently. They each receive £85 in new-style jobseeker’s allowance per week, £214 in universal credit, and £40 in child benefit. Their weekly income is £448 after council tax support, or £1940 per month, of which nearly half is spent on rent.
2024–2025 The chancellor announced a 6.7% increase in benefits for all recipients, translating into an extra £66.52 per week or £288 per month for them.
- Married couple, two children (One higher income)2023–2024 Sandra, the working parent, has an income of £49,000 and pays £7,286 in income tax and £4,189 in national insurance. This equals a net yearly salary of £37.525. The family’s annual income is £39,599, with the £2,075 in child benefit they receive.
2024–2025 Sandra experiences fiscal drag and is forced to file at a higher rate of taxation for the first time following the payment of a substantial £6,000 bonus. Her take-home pay increases to £41,703. The annual value of their child benefit would be £2,212, but since she makes more than £50,000, she is also subject to the high income child benefit tax charge, which reduces it to £1,107. Even with a £6,000 pay increase, the family’s annual income has increased by just £3,210.
- Rich couple, no kids (Both top earners)2023–2024 After deducting £6,330 for national insurance and £53,703 for income tax from his £150,000 yearly salary, Fred is left with a net annual salary of £89,967. Suella’s £85,000 is worth £58,538 net after deductions. As a result, their annual net income is £148,505 combined.
2024–2025 Each of them will receive an additional £565 from the NI, giving them an additional £1,130 to spend on water skiing lessons this year.
- Single pensioner (New state pension)2023–2024 The value of Wendy’s state pension is £203.85 per week, £883 per month, or £10,600 annually. Despite not being eligible for pension credit, she is paid £900 for cost of living and receives a £300 winter fuel payment. Wendy receives £23.69 in weekly council tax support in addition to £79.55 in housing benefit. She pays £477 per month for her private rented home in South Wales.
2024–2025 The 8.5% pension increase will help this pensioner. i.e., her weekly basic pension will increase by £17.32. She’s waiting to find out how much the cost of living benefits will be for the upcoming year. She is unaffected by the NI cut. She is better off overall by at least £908 a year.
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Married pensioners (State pension plus £8,000 private pension) 2023–2024 The holder gets £18,600 gross annually after the income from the private pension is added to the first state pension. They pay £1,206 in income tax on this. The annual value of the second pension is £10,600, resulting in a net combined income of £27,994.
2024–2025 The tax bill on the first income increases by £316 when the 8.5% state pension rise and their private pension rise by the same amount are applied. In total, they have £2,165 more this year than they did last.
