Millions of workers will receive a National Insurance cut in their next payslips as the new tax year gets underway.

The main rate of employee national insurance will be cut by two per cent from 10 per cent to eight per cent from April 6.

It is the second cut in the last six months following an identical reduction from 12 per cent to 10 per cent after last year’s autumn statement.

When combined, the two cuts will save the average worker on £35,400 more than £900 a year, the Government has said.

Despite the NI cuts, some other thresholds may act as a 'stealth tax' and make people feel worse off just by being left unchanged.

Frozen income tax bands pull people into higher brackets over time as their pay increases.

The standard personal allowance is £12,570, which is the amount of income that someone does not have to pay tax on.

Prime Minister Rishi Sunak said: “Hard work is one of my core values, and the progress we have made on the economy means we can reward work with a tax cut worth £900 for the average earner.

“This marks the next step in our plan to end the unfairness of double taxation of work by abolishing national insurance in the long term.”

Rachel Reeves, Labour’s Shadow Chancellor, said: “Every time Rishi Sunak goes on the television claiming he is cutting taxes, he is insulting the intelligence of hard-working families.”

She accused the Government of “giving with one hand and taking with another”.

Changes to child benefit

Millions of families who claim Child Benefit are set to automatically receive increased payments from this week.

HMRC has confirmed that families with one child will now receive £1,331 per year, an increase of more than £83.

Families will also receive £881 per year for each additional child they have after that, an annual increase of £54.60.

From April 6, 2024, families where the highest earner has a salary of up to £60,000 a year will not be subject to the High Income Child Benefit Charge (HICBC). Previously, a person who had an annual income of £50,000 or more would be liable to pay the charge if they or their partner were receiving Child Benefit.

Laura Trott, chief secretary to the Treasury, added: “We are ending the unfairness in the child benefit system, and as a result 170,000 families will no longer have to pay back child benefit, and nearly half a million families will save an average of around £1,300 next year.

“The legacy of the pandemic and the war in Ukraine has put pressures on everyone’s cost of living. But, by taking difficult decisions, the economy is starting to turn a corner, and we can now provide further support to parents.”

Pensioners set for £900 increase

Pensioners will see their state pension increase by up to £900 next month, as an announcement made at last year’s autumn statement comes into effect.

Chancellor Jeremy Hunt confirmed that the triple lock on pensions would be honoured, with state pensions set to rise from April 8.

Under the triple lock – which guarantees an increase in line with average earnings, inflation or 2.5 per cent, whichever is highest - pensions will increase by 8.5 per cent next month.

He told MPs: "The triple lock has helped lift 250,000 older people out of poverty since its inception in 2011.

"It has been a lifeline for many during times of inflation.

"We honour our commitment to the triple lock in full. We will increase the new state pension by 8.5 per cent, worth up to £900 more a year."