On 23 March 2022, Chancellor Rishi Sunak delivered his Spring Statement. It is an update on the current state and future expectations of the nation’s finances.

As expected, the announcements from the Chancellor aimed to soften the impact of the cost-of-living crisis and combat increasing high levels of inflation.

There are a few announcements relating to pension scheme benefits. There are also changes to the National Insurance threshold and the basic rate of income tax.

The National Insurance threshold will be increased

The point at which people start paying National Insurance, known as the National Insurance threshold, will be increased from £9,568 to £12,570 from July 2022. It is already due to increase to £9,880 from 6 April 2022.

The Government did not make any changes to the planned 1.25% increase in the rate of National Insurance which will take effect from 6 April 2022.

Income tax will reduce

The basic rate of income tax will be reduced from 20% to 19% before the end of the Parliament in 2024.

The State Pension increase commitment will be honoured

The Government will increase the value of the State Pension every new tax year by either inflation, average wage growth or 2.5% – whichever is higher. This is known as the triple-lock commitment, which was temporarily suspended for the 2022/23 tax year.