Martin Lewis questions major change in Budget and asks 'where ...

Martin Lewis has responded to Rachel Reeves' first Labour budget, questioning the source of funding for a key announcement. On X (formerly Twitter), he highlighted the significant change in national insurance for employers, where larger businesses will contribute 15% starting from April 2025, as announced by the Chancellor.

Reeves stated that the burden would fall on those "with the broadest shoulders". However, Lewis inquired how businesses would cover the increased cost of £615 per employee.

He commented: "The change of threshold so employers now start paying National Insurance at £5,000 not £9,100 is big. For the employers who pay it, at the new 15% rate that alone's £615 increased cost per most employees per year.

"The question is where will that money come from, profits, increasing charges or reducing salaries/benefits?" He added: "The reason I say 'for employers who pay it' is because the Employers Allowance for NI has been increased from £5,000 to £10,500 a year (so this is amount off employers NI bill) so small businesses won't pay it."

Before the government's announcement, he had voiced concerns about the importance of offering something to Britons in light of the decision to scrap the winter fuel payment. With the fate of the nation's poorest at stake, he described the budget as "one of the tightest" in recent memory.

After a discussion with the Chancellor, he highlighted several areas he hoped to see changes in, including the winter fuel payment, carer's allowance, energy bills, lifetime ISAs, tax-free childcare, child benefit, and again the winter fuel payment. Speaking to The Times, he mentioned that his "realistic asks" were part of the conversation, with some being acknowledged in the latest fiscal update, reports the Mirror.

Mr Lewis commented: "We are looking at perhaps one of the tightest budgets we have seen in a long time, but none of the things I am suggesting are pipe dreams. They are realistic asks and many do not require much expenditure. A large number of things within the consumer finance world are simply poorly designed. We need a fair system that works well."