Shropshire Star

Shropshire debt expert explains how National Insurance cut 'doesn't go far enough'

A Shropshire debt expert has warned the National Insurance cut announced today by Jeremy Hunt will not help those on the lowest incomes.

Dan Bebbington, Debt and Energy Manager at The Wrekin Housing Group

Dan Bebbington, debt and energy manager at The Wrekin Housing Group, said it was "positive" that a number of measures to help those in debt and financial crisis were included in the Spring Budget.

But he said the chancellor had missed an opportunity to help millions of other households struggling with the cost-of-living crisis.

In what was likely to be the government’s last budget before the upcoming general election, Mr Hunt’s biggest announcement was another 2p reduction in National Insurance, replicating the cut announced last autumn. The government says this will save the average worker £450 a year.

Mr Bebbington said: “This latest National Insurance cut will help many households but sadly those on the lowest incomes won’t see any uplift in their take-home pay.

“Pensioners, who don’t pay National Insurance, will also see no benefit as a result of this policy change.

“Instead, the chancellor could have considered raising the income tax thresholds, which are currently frozen until 2028. Keeping the tax-free amount at just £12,570 means that more people are paying higher taxes each year as wages rise.”

Presenting the budget to MPs in the Commons this afternoon, Mr Hunt said he wanted to help those in debt by scrapping the £90 fee to obtain a Debt Relief Order.

He also said those on Universal Credit taking out Budgeting Advance loans would be given two years to repay them, instead of one.

Mr Bebbington said: “We know more and more people are finding themselves in debt and severe financial hardship due to the cost-of-living crisis, so it is welcome that these people have been granted some help.

“For people seeking a DRO, knowing they will no longer have to find the fee will be a weight lifted off their shoulders. It has been a real barrier.”

Meanwhile the Household Support Fund (HSF), which gives money to local councils to fund grants to those most in need, will be continued for another six months. It had been due to end this month.

Mr Bebbington said: “This is more welcome news, but we had been hoping it would be extended for longer.

“Ideally, it would become permanent. Times are really hard for so many people at the moment and bills are continuing to rise. This is not a situation that will resolve itself in six months.

“What we really need is more support to catch people before they reach the point of crisis. This budget could have been a real opportunity for the government to extend a helping hand to people who are struggling the most.

“The £20 universal credit uplift during Covid was a lifeline to so many people, as were the cost-of-living payments made to millions of households over the last two winters.

“It’s a shame that no continuation of this support has been offered in this budget.”

Dan is part of The Wrekin Housing Group’s Money Matters Team that offers support to the housing association’s 28,000 tenants, including advice on budgeting, benefits, energy and debt.

During the last year, the team has received 2,315 requests for support and handled 172 referrals for energy advice.