Single
Low income
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2023-24 James, 24, works 35 hours a week at a cafe and is paid the minimum wage of £10.42 an hour. This means he receives £364.70 a week or £18,964 a year. After tax and his reduced national insurance bill – the lower rate is introduced in January – are deducted he is left with £16,950.
2024-25 The minimum wage rises in April to £11.44, as the Low Pay Commission suggested. This means his gross income rises to £400 a week or £20,820 a year. After tax and the new lower NI, he receives £18,345 net, about £1,395 more than the previous year.
Single
Lone parent
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2023-24 Bob earns £16,000 working part time which is topped up by benefits. Income tax and NI deductions account for £1,080 a year. Child benefit is worth £24 a week, or £1,248 a year. The family don’t pay rent but receive an extra £80.21 a week in the form of universal credit payments – giving a total net income of £20,339 a year.
2024-25 His post tax/NI income increases by £70 a year to £14,990. Child benefit rises to £1,332 for the year, and their universal credit rises to £4,954 per year. Overall they are £949 a year better off, albeit while struggling with higher food bills.
Average earner
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2023-24 Helen earns the UK’s typical (median) wage of £38,000 and pays £5,086 a year in income tax and a national insurance bill of £2,924. Her monthly take-home pay is £2,499 after tax, or £29,990 a year.
2024-25 Her employer has awarded her £2,500 pay rise. As a result her tax bill rises to £5,586 while she pays a NI bill of £2,793. Out of £2,500 gross pay rise, she is £2,131 a year net better off.
Married couple with two children
Both unemployed
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2023-24 James and Peter both were recently laid off, and are now relying on benefits. They receive £214 a week in universal credit, £85 a week in new-style jobseeker’s allowance each and £40 child benefit. Once council tax support is added, they receive a total of £448 a week, or £1940 a month, of which almost half goes on rent.
2024-25 The chancellor said that all benefits would rise by 6.7%, meaning their benefits package is now worth an extra £66.52 a week or £288 a month.
Married couple, two children
One higher income
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2023-24 The working parent, Sandra, pays £7,286 income tax and £4,189 in national insurance on earnings of £49,000. This translates into a net annual salary of £37,525. The family receives child benefit which is worth £2,075 a year – giving a total income of £39,599.
2024-25 After she’s paid a generous £6,000 bonus, Sandra becomes a higher rate taxpayer for the first time – a victim of fiscal drag. Her net income rises to £41,703. Their child benefit would be worth £2,212 a year, but because she earns more than £50,000 a year, she also now faces the high income child benefit tax charge, which halves it to £1,107. Despite a £6,000 pay rise the family is just £3,210 year better off.
Rich couple, no kids
Both top earners
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2023-24 Out of Fred’s £150,000 annual salary, he pays £53,703 income tax and £6,330 in national insurance, leaving him with a net £89,967 a year. After deductions, Suella’s £85,000 is worth £58,538 net. This gives them a combined net income of £148,505 a year.
2024-25 The cut to NI is worth an extra £565 to each of them meaning they have an extra £1,130 to spend on water skiing lessons this year.
Single pensioner
New state pension
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2023-24 Wendy’s state pension is worth £203.85 a week, £883 a month or £10,600 a year. She does not qualify for pension credit but she receives cost of living payments of £900 and a £300 winter fuel payment. Wendy lives in private rented accommodation in south Wales (paying £477pcm) and is entitled to £79.55 a week in housing benefit and council tax support of £23.69 a week.
2024-25 This pensioner will benefit from the 8.5% pensions uplift. meaning her basic pension will rise by £17.32 a week. She is waiting to hear what the cost of living payments will be worth over the coming year. The NI cut doesn’t affect her. Overall, she is at least £908 a year better off.
Married pensioners
State pension plus £8,000 private pension
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2023-24 Once the first state pension is combined with the income from the private one, the holder receives a gross income of £18,600 a year. From this they lose £1,206 to income tax. The second pension is worth £10,600 a year giving a net, combined income of £27,994.
2024-25 After the state pension rise of 8.5% is applied and their private pension rises by a similar amount, the tax bill on the first income rises by £316. Overall they are £2,165 better off this year than last.
Some figures rounded up to the nearest pound, and different rates apply in Scotland.
Tax and national insurance calculations provided by the accountants, Blick Rothenberg.
2023-24 figures include the national insurance cut scheduled to come into effect on 6 January 2024.
Benefits calculations provided David Samson, benefits expert at the UK-wide anti-poverty charity Turn2us. Turn2us offers practical information and support to people facing financial insecurity. It has a free benefits calculator to find out what benefits you may be able to plus a grants search tool to find out if you could get help from charitable grants.
