Resolution Foundation: UK Working Households £400 Poorer Due to Tax & NI Hikes

The average working household in the UK is expected to be £400 worse off this year. This is due to several reasons. These include a freeze on the income tax threshold and higher National Insurance contributions for employers.

The Resolution Foundation warns that the poorest half of workers may lose 3% of their disposable income in the next five years. This loss could be around £500 for each household.

The think-tank noted that freezing personal tax thresholds would move more earners into higher tax bands. It also said that an increase in employer National Insurance would slow down wage growth. Adam Corlett from the Resolution Foundation said: "The new tax year has arrived, and brings with it higher taxes, even larger bill increases, and benefits that aren't keeping pace with the rising cost of living." Rising utility bills and council tax increases further exacerbate the financial strain on households, with many local authorities raising council tax by the maximum allowed.