Bim Afolami repeats claim about £900 tax cut for ‘average worker’

In an article for the Daily Express, economic secretary to the Treasury Bim Afolami claimed: “Since January we have cut the taxes of the average worker by £900”.

As we’ve said before, this figure is missing context because it doesn’t account for the effect of ongoing tax threshold freezes. Overall, the average worker will experience a much smaller tax cut this year. 

In January the main rate of employee National Insurance contributions (NICs) was reduced from 12% to 10%, before being further reduced to 8% in April.

The £900 figure refers to the amount an average full-time worker (earning around £35,000) will save in NICs this financial year as a result of this combined four percentage point reduction. But once the impact of other tax changes is factored in, overall tax savings are lower.

That’s because since 2021 the government has frozen income tax and NICs thresholds—so the taxable income of an average worker is higher than it would have been if these thresholds had risen in line with inflation (as was normal practice in the past).

The Institute for Fiscal Studies says that once all changes to NICs and income tax are taken into account, the average earner will save £340 in 2024/25 compared to what they would have paid otherwise.