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Illustrator: Ryan Gillett Illustration: Ryan Gillett

Budget 2021: who wins and who loses?

This article is more than 2 years old
Illustrator: Ryan Gillett Illustration: Ryan Gillett

How Sunak’s measures on tax and benefits will affect single people, couples and those receiving pensions

Single, 25, no children

Unemployed

Illustration: Ryan Gillett/The Guardian

2021-22 Their universal credit payments were worth £412 a month between April and September – reduced to £325 a month for the rest of the year after the £20 a week “uplift” was withdrawn in October. Housing payments depend on the property and where they rent. That aside, they receive £4,418 during the year.

2022-23 Although their UC payments now rise by inflation (3.1%) to £335 a month, their payments are considerably lower than during the first half of 2021.

Verdict Overall they will be £400 a year worse off this year.


Single, no children

Earns £34,000

Illustration: Ryan Gillett/The Guardian

2021-22 She pays £4,284 a year in income tax while national insurance accounts for a further £2,932. This gives a net annual income of £26,784 or £2,232 a month.

2022-23 Her income tax take will remain the same. However, the 1.25% increase to NI rates to pay for social care means that overall she receives £266 less pay than last year.

Verdict Worse off.


Single, one child

Earns £14,000 part-time on minimum wage, plus benefits

Illustration: Ryan Gillett/THE GUARDIAN

2021-22 Income tax and NI deductions account for £816 a year. Child benefit is worth £21.15 a week, or £1,100 a year. They will benefit from the new 55% universal credit taper from December giving a total UC top-up of £3,675 and an annual income of £17,959.

2022-23 The increase to the ”national living wage” raises their earnings to £14,800. However, they pay £164 extra income tax and £125 more NI. Child benefit rises £33.80 for the year, but their UC rises to £3,752.

Verdict Overall they are £546 a year better off.


Single

Earns £120,000

Illustration: Ryan Gillett/The Guardian

2021-22 Our high flyer pays £39,432 a year in income tax and £6,279 in NI each year, leaving £74,289 a year to be spent on the finer things.

2022-23 His income tax bill remains unchanged but the increase in NI leaves him a shade over £1,341 worse off a year.

Verdict: Worse off – his net income is down to £72,948.


Unmarried couple in their 30s, no children

First income of £55,000, second income of £31,000

Illustration: Ryan Gillett/The Guardian

2021-22 Our couple pay a combined income tax and NI bill of £20,663, giving them a combined net annual income of £65,337.

2022-23 While their income tax bill remains unchanged, they are both hit by the NI increase. The higher earner pays £529 more NI while the other is paying an extra £239 a year.

Verdict Overall the couple are £757 a year worse off.


Unmarried couple, two children

First income of £23,000, second income of £18,000

Illustration: Ryan Gillett/The Guardian

2021-22 The higher earner loses £3,696 to tax and NI, while the second person pays £2,162 for both. Their child benefit is worth £35.15 a week (£1,828 a year), giving a net household income of £36,970.

2022-23 The increase to NI payments leaves the higher earner £128 worse off, while the second earner is paying £66 a year more. They will get a small increase in child benefit.

Verdict They are £137 a year worse off.


Married couple, three children

One income of £57,000

Illustration: Ryan Gillett/The Guardian

2021-22 The main-breadwinner is paying £15,247 a year in combined tax and NI. Child benefit would be worth £2,556 a year if they earned less than £50,000 a year – but is worth only £767 a year once the high-income tax charge is applied.

2022-23 Their income tax bill is unchanged but they pay £554 a year more in NI. Their child benefit rises by £24 a year.

Verdict They are left £530 a year worse off.


Married couple, two children

Both unemployed

Illustration: Ryan Gillett/The Guardian

2021-22 Their universal credit payments were worth £1,116 a month from April to September and £1,029.49 from October to March. Once their child benefit at £35.15 a week is added in, they receive a total of £14,701 for the year.

2022-23 The £20 a week uplift they enjoyed in the first six months of 2021 is long gone, but a 3.1% increase to their benefits compared with March helps. Overall they will receive £90 a year less than they did in the previous 12 months.

Verdict Worse off.


Single pensioner

Basic state pension plus private pension of £12,000

Illustration: Ryan Gillett/The Guardian

2021-22 Her state pension is worth £137.60 a week or £7,155 a year. She has to pay income tax of £1,315 but no national insurance, giving an annual income of £17,840.

2022-23 The basic state pension rises in line with inflation to £141.85 a week. Her income tax bill rises by £44 a year.

Verdict Overall she is better off by £177 for the year.


Married pensioners, both in their 70s

State pension plus private pension of £8,000

Illustration: Ryan Gillett/The Guardian

2021-22 Between them they receive pension payments totalling £220 a week or £11,440 a year. The fact that they transfer their marriage allowance means they pay £263 a year in income tax. They pay no NI.

2022-23 Their pensions rise by 3.1% but their tax bill rises by £44 a year.

Verdict Overall they are £309 better off this year.

Figures produced by Dan Rust of DBR Consulting with annual figures rounded to the nearest pound.

This article was amended on 28 October 2021 to clarify that pensioners will only pay the 1.25% health and social care levy from April 2023 if they are working.

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