Martin Lewis has provided a positive update for households who earn less than £50,000 after Chancellor Kwasi Kwarteng unveiled a "new growth plan" on Friday.
The Money Saving Expert founder has been keeping his many followers up-to-date with the latest news as the cost of living crisis worsens. The finance guru is known for his switching and money-saving tips, but recent events have left even him at a loss at how to help people.
With the cost of living crisis worsening, many of us are trying to find ways to save money where we can. Every penny counts as the cost of food and energy continues to soar.
Mr Kwarteng put forward a number of changes in parliament which on the outlook seem more beneficial to rich households, but Mr Lewis composed an "explainer" video to help explain how exactly people will be affected by Stamp Duty, National Insurance and Income Tax.
Part of the Mr Kwarteng's "new growth plan" was to cut Stamp Duty, with the nil rate band doubling from £125,000 to £250,000. This means 200,000 more people every year will be able to buy a home without paying any Stamp Duty at all - and the standard buyer in England will save £2,500, according to Gov.uk.
Mr Lewis said many fans have asked him if they will still get the new rates if they have exchanged homes but not "completed". In a tweet, he replied: "In general yes, stamp duty is crystallised at completion (though there can be some exceptions - check with your solicitor)."
Anyone buying a house worth between £250,000 and £900,000 will pay a 5% Stamp Duty, he said. Using a £300,000 property as an example, Mr Lewis said: "You pay no Stamp Duty on the first £250,000, you pay 5% on the remaining £50,000, which is £2,500. Yesterday, you would have paid £5,000."
He also said first time buyers purchasing a property worth up to £650,000 will not pay any Stamp Duty on the first £425,000 - compared with £300,000 previously.
On Income Tax, he said, the basic rate has dropped to 19% (from 20%). People currently start paying Income Tax when their earnings reach £12,570, though this may change when the budget is announced next year, Mr Lewis said.
This means anyone earning this amount or more will have more take home pay. Though, he added: "For anyone earning £50,000 and over, you don't really get any more gain. The gain is really on the income between £12,570 and £50,000".
The Government also announced that the National Insurance cut for millions of Brits will take effect on November 6. Mr Kwarteng confirmed that the NI hike imposed by his predecessor Rishi Sunak in April was being reversed within weeks.
The Government will lower National Insurance from 13.25% back down to 12%, where it was before a Tory hike in April. The change had been expected next Spring but was brought forward. It is said 28 million people across the UK will keep an extra £330 a year each, on average, in 2023-24.
