Reported by The Guardian
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Josh graduated two years ago from an English university and is back home in London. He earns £28,500, out of which he pays £3,186 in income tax and £1,274 in national insurance (NI) contributions a year. This results in take-home pay of £2,003 a month or £24,040 a year. Despite an outcry, the salary threshold for repaying his plan 2 student loan will remain frozen at £29,385 for three years from next April, so any pay rise is likely to trigger payments. Graduates must repay 9% of earnings over the threshold.
Layla earns the UK’s typical (median) wage of £41,000 as a nurse. She pays £5,684 in income tax and £2,274 in NI contributions. This results in take-home pay of £2,753 a month or £33,041 a year.
Traditionally income tax bands keep pace with inflation, but they have been frozen until 2031. This means a greater proportion of pay is taxed than would otherwise be expected.
With no changes to the “big three” – income tax, NI and VAT – her finances will look much the same in 2027.
She qualifies for the £100 energy payment for English households in council tax bands A-D (council tax is devolved). Her energy bill will also be reduced by the decision to abolish standing charges on gas bills and the extension to the VAT cut on electricity to July.
Simon is an accountant earning £65,000, and Maria earns £28,000 as a part-time teacher. Some of their child benefit is clawed back through the high-income child benefit charge , which is a tax penalty that kicks in at £60,000. As a result the couple have combined take-home pay of £6,141 a month or £73,690 a year.
With no big tax changes this budget has not transformed their finances. Like other Britons they benefit from the energy bill shake up and their band D home qualifies for…