The fall from 10% to 8% means the average worker will save around £450 a year (Picture: Getty/Metro.co.uk)
Chancellor Jeremy Hunt has cut National Insurance for workers by another 2p from April 6.
It means the average worker will save around £450 a year as the rate falls from 10% to 8% as he pledged to ‘make work pay’.
The self-employed rate is set to fall from 8% to 6%.
Follow Metro.co.uk’s blog for live updates on the spring budget
It follows Mr Hunt cutting National Insurance by 2p in the autumn budget in what is seen as a bid to win over voters ahead of this year’s general election.
The Chancellor decided against cutting income tax which was deemed too expensive and potentially inflationary.
It comes after the Office for Budget Responsibility (OBR) downgraded the amount of ‘fiscal headroom’ available for spending commitments and tax cuts.
This is because following the autumn cut to National Insurance Mr Hunt’s fiscal headroom fell from £31billion to £13billion.
The OBR warned this was a historically slim margin because previous chancellors kept about £29.7billion in the reserve.
Jeremy Hunt poses with the red Budget Box as he left 11 Downing Street this morning (Picture: AFP via Getty Images)
The announced cut to National Insurance is cheaper for the government than a cut to income tax because pensioners don’t pay it.
According to the Resolution Foundation, when this 2p cut to National Insurance sits alongside all the personal tax changes announced this parliament, people earning £27,000 to £59,000 will be better off overall.
Higher earners are expected to be worse off by £500.
Someone on £16,000 will be the worst affected proportionally.
Mr Hunt argued over the weekend that the UK needs to ‘move towards a lower tax economy’ saying he has a ‘moral duty to leave as much money in people’s pockets as possible’.
More Trending
Talking on the BBC’s Sunday with Laura Kuenssberg at the time, he said: ‘I do want, where it is possible to do so responsibly, to move towards a lower tax economy, and I hope to show a path in that direction.
‘This will be a prudent and responsible budget for long-term growth, tackling inflation, more investment, more jobs and that path to lower taxation as and when we can afford that.’
He said bringing down the tax burden would mean ‘being responsible with public spending and showing that we are going to spend it more carefully’, when talking to Sky News.
This is a developing news story, more to follow soon… Check back shortly for further updates.
Got a story? Get in touch with our news team by emailing us at webnews@metro.co.uk. Or you can submit your videos and pictures here.
For more stories like this, check our news page.
Follow Metro.co.uk on Twitter and Facebook for the latest news updates. You can now also get Metro.co.uk articles sent straight to your device. Sign up for our daily push alerts here.