Martin Lewis has reacted to Rachel Reeves’ landmark first Labour budget, asking where money for one key announcement will “come from.”
The money guru stated that he had previously met with Chancellor Rachel Reeves to discuss the budget. During that meeting, he provided the government with a series of “realistic asks.”
Following the Chancellor’s historic announcement this afternoon, he took to X, formerly Twitter, to discuss the significant changes to national insurance for employers, which will see larger businesses contribute 15% beginning in April 2025.
She stated that those “with the broadest shoulders” will bear the burden. Lewis, on the other hand, has inquired as to how the businesses will finance a rise of £615 per employee.
He stated: Employers now begin paying National Insurance at £5,000, rather than £9,100, thanks to a significant change in the threshold. At the new 15% rate, this alone represents a cost increase of £615 per most employees annually for employers who pay it.
The question is, “Will profits, an increase in fees, or a decrease in salaries or benefits provide that money?”
“Added he: The reason I say “for employers who pay it” is that small businesses won’t pay because the Employers Allowance for National Insurance has increased from £5,000 to £10,500 per year, which is taken off their NI bill.
He had previously voiced some uncertainty regarding the government’s announcement before it was made, stating that Ms. Reeves needed to offer something to Britons in response to the decision to end the winter fuel payment. He suggested that the budget was “one of the tightest” he had seen “in a long time” as the lives of the poorest people in the country were in jeopardy.
After meeting with the Chancellor, he talked about the changes he wanted to see in important areas like the winter fuel payment, the carer’s allowance, energy bills, lifetime ISAs, tax-free childcare, child benefit, and the winter fuel payment.
He stated to The Times that he had provided the government with “realistic asks,” some of which were incorporated into the announcement that was made today.
Mr. Lewis stated, Even though this budget may be one of the tightest in a long time, none of the things I propose are out of the question. They’re reasonable requests, and many of them don’t cost much. In the world of consumer finance, a lot of things are just poorly designed. We require a fair and effective system.