UK households warned over National Insurance after 'drop in contributions'

A National Insurance warning issued to UK taxpayers after today's inflation announcement. A fall in National Insurance contributions helped push up borrowing in April, said Grant Fitzner, the chief economist at the Office for National Statistics.

He said: "At £20.5billion in April, borrowing was up £1.5billion on April last year." And a significant drop in National Insurance contributions meant that receipts "did not grow as fast as spending", he warned UK households.

In a statement alongside the ONS figures, Mr Fitzner said: "Here, falls in expenditure on energy support were offset by increases in benefit spending from the annual uprating. Relative to the size of the economy, debt remains at levels last seen in the early 1960s."

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The Conservative Party MP and Chancellor, Jeremy Hunt, welcomed the fund's article IV report, saying: "Today's report clearly shows that independent international economists agree that the UK economy has turned a corner and is on course for a soft landing.

"The IMF have upgraded our growth for this year and forecast we will grow faster than any other large European country over the next six years - so it is time to shake off some of the unjustified pessimism about our prospects."

"In light of the medium-term fiscal challenge," the report said. "Staff would have recommended against the NIC rate cuts, given their significant cost." A spokesperson for the Treasury said: "We rightly protected millions of jobs during Covid and paid half of people's energy bills after Putin's invasion of Ukraine sent bills skyrocketing - but it wouldn't be fair to leave future generations to pick up the tab.

"That's why we must stick to the plan to get debt falling. The economy is turning a corner, with strong growth this quarter and inflation close to target, allowing us to cut taxes for the average worker by £900 a year."