Budget 2024: What the National Insurance cut means for you

He told MPs in his Budget that the rate of national insurance for workers earning between £12,570 and £50,270 would reduce from 10 per cent to 8 per cent.

Mr Hunt said change could save the average worker £450 a year, adding up to £900 when combined with last year’s move.

But what could the cut mean for you?

Andy Mielczarek, founder and CEO of SmartSave, a Chetwood Financial company, said: “Cutting NI will be celebrated, but we cannot escape the limited effect it will have. Someone on a salary of £30,000 will only get an extra £348 in their pocket annually thanks to the change, which will do little to reverse the impact of rampaging energy bills, food prices and living costs over the past two years.

“We should not be overly critical; the Chancellor does not have a bottomless pot of funds to allow for huge sweeping tax cuts. Instead, though, it would have been good to see a greater focus on policies and reforms that could empower people to effectively save, invest, and achieve their financial goals.

“Steps need to be taken to simplify and incentivise savings. There is also a pressing need for better education and support when it comes to financial planning, helping people to better assess the wide variety of savings products and providers available to them. Tax cuts need to be bolstered by greater investment into schemes that protect and serve consumers as they make financial decisions."

Experts have said that a 2p reduction in national insurance contributions would not by itself be enough to stop the tax burden reaching record levels by the end of this decade.

The Institute for Fiscal Studies said the measure would not prevent taxes rising to about 37% of GDP by 2028-29.

The Resolution Foundation think tank said the biggest net beneficiaries of the national insurance cut, combined with threshold freezes, are those earning £50,000, while those earning £19,000 or less will actually be worse off.