The money saving expert and founder of the MoneySavingExpert website has been closely following the Budget
Martin Lewis has responded to Rachel Reeves’ historic first Labour budget, questioning where the funding for a key announcement in the document will “come from”. Following the Chancellor’s significant announcement this afternoon, he took to X, previously known as Twitter, to discuss the substantial national insurance changes for employers.
These changes will require larger businesses to contribute 15 percent from April 2025. The burden will be placed on those “with the broadest shoulders”, according to Reeves.
However, Lewis has questioned how these businesses will cover a £615 per employee increase. He stated: “The change of threshold so employers now start paying National Insurance at £5,000 not £9,100 is big. For the employers who pay it, at the new 15% rate that alone’s £615 increased cost per most employees per year. The question is where will that money come from, profits, increasing charges or reducing salaries/benefits? ” He further added: “The reason I say ‘for employers who pay it’ is because the Employers Allowance for NI has been increased from £5,000 to £10,500 a year (so this is amount off employers NI bill) so small businesses won’t pay it.”
READ MORE: Budget 2024 updates as Rachel Reeves sets out Labour’s tax, pension and benefit plansREAD MORE: All the key changes announced in the 2024 Budget explained
Prior to the government announcement, he highlighted his concerns, stressing it was crucial for Ms Reeves to deliver measures to support Britons in light of scrapping the winter fuel payment. With the country’s most vulnerable at risk, he described the budget as “one of the tightest” seen “in a long time”, reports the Mirror.
After engaging with the Chancellor, he listed desired reforms in critical areas like winter fuel payments, carer’s allowance, energy bills, lifetime ISAs, tax-free childcare, child benefit, and again the winter fuel payment. Speaking to The Times, Mr Lewis emphasised that his proposals were “realistic asks”, noting several had been adopted in today’s statement.
He stated: “We are looking at perhaps one of the tightest budgets we have seen in a long time, but none of the things I am suggesting are pipe dreams. They are realistic asks and many do not require much expenditure. A large number of consumer finance issues stem from poor design. What we need is a fair system that functions effectively.”
