This week, we enter the new tax year, and with it a number of tax and welfare changes take effect which will help people across South Shropshire with the cost of living.

The 2p cut in National Insurance, announced by the Chancellor in the Budget last month, sees the main rate of employee National Insurance fall from 10% to 8%. Combined with the previous 2p cut which came into effect in January, this will save the average worker over £900 a year. It also sets a clear direction of travel for lower personal taxation. 

In a welcome boost for the lowest paid, this week also sees the National Living Wage (NLW) increase by 9.8 per cent, from £10.42 to £11.44 an hour. This pay rise, worth over £1,800 a year for a full-time worker, is the biggest cash increase in the NLW in more than a decade.

Also supporting households, this week all working-age benefits, including Universal Credit, will be uprated in line with the September 2023 Consumer Price Index Inflation – 6.7 per cent. For pensioners, the basic State Pension, new State Pension, and Pension Credit standard minimum guarantee will be uprated in line with average earnings growth of 8.5 per cent.

With inflation having fallen from its peak of 11.1% to just 3.4% now, support through the NLW, working age benefits, and pensions have all been uprated at well above current inflationary levels. Inflation is forecast to hit the 2 per cent target within months, which should further reduce the impact of the cost of living on families here in South Shropshire. 

Over the Easter weekend, the new energy price cap on consumer energy bills took effect, following announcement by the regulator Ofgem. The cap for a typical household has dropped 12.3% from £1,928 per year to £1,690, the lowest level since Russia's invasion of Ukraine in 2022 which sent prices soaring. 

On 1st April, the government launched the rollout of the largest ever expansion of childcare in England’s history, with eligible working parents of two-year-olds now able to access 15 hours of free childcare per week, helping over 100,000 families across the UK. This will be further expanded in September, with working parents who have children aged from nine months able to benefit from an additional 15 hours of free childcare per week. 

By putting £900 back in the pockets of the average worker; freezing business rates; boosting pensions; cutting the cost of childcare; and delivering a record increase to the National Living Wage, this government is providing welcome relief against cost of living pressures, helping families across South Shropshire.