As the cost-of-living crisis continues to escalate, Martin Lewis is encouraging everyone to check their payslips.
The consumer champion sent an unusually dejected message to his 8.4 million newsletter followers this week as he addressed the escalating cost of living as taxes and energy bills soar.
Taking to Twitter and via his weekly newsletter, Mr Lewis wrote: “I was saddened to ask my team to put this together.
“But my email inbox is full of people who are so desperate they can’t make it … I wanted to try some help.”
Hello advice came after the money expert admitted he had almost depleted his stash of traditional money-saving tools when it comes to energy bills.
Tips included investing in heated insoles, hot water bottles and other energy-saving measures that Britons can resort to instead of turning on central heating.
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There were also tips on the right clothes and where to buy them cheapest, as well as the psychological importance of socks and warm feet.
The floor is the coldest part of the house – so putting your foot on a stool when you sit down is a good idea.
But Mr Lewis also warned the public about the four key financial audits to be conducted this week.
As the new tax year begins and higher Social Security comes into effect, there are four steps all households should take.
“Check your new take home salary after NI 10% increase – Check your tax number is correct (legally your responsibility) – Get/fill a LISA for £1,000 free cash for first time buyers – Grab cash- ISAs or throw them away,” he tweeted.
Check your payslip
Millions of workers will pay more taxes on their income starting this week as higher Social Security comes into effect to fill a gap in social care funding.
Social Security payments increased 1.25 percentage points from 12% to 13.25% on April 6.
You pay National Insurance for earnings above £9,850 a year, but that threshold rises to £12,570 in July.
For earnings over £50,270, the rate at which you pay National Insurance has also increased by 1.25 percentage points to 3.25%, up from 2%.
You must check your payslip to ensure you have taxed the correct amount.
The Institute for Fiscal Studies (IFS) calculates that the combined tax rate increase and threshold increase will mean a decrease in the Social Security bill for those earning less than £35,000 for the 2022/23 tax year, compared to last year.
Those earning more than £35,000 pay more, the IFS calculates.
MoneySavingExpert founder Martin Lewis explains: “If you suffer from it [amount]that’s a win if you’re over it [amount]then the two measures are a loss for you,” he said in a video posted to Twitter.
Martin added: “Effectively it works with earnings from over £9,600 up to around £35,000, you either don’t pay more or you pay less [the pay scale]pays less social security than it currently does.
“If you earn £35,000 or more, the 1.25 percentage point increase outweighs the change in the starting threshold, so you have to pay more Social Security.”
Here’s how your Social Security is changing, according to numbers from the Institute For Fiscal Studies:
- £20,000 annual salary: NIC now – £104; NIC April 6th – £112; NIC July 6th – £82
- £30,000 annual salary: NIC now – £204; NIC April 6th – £222; NIC 6th July – £192
- £40,000 annual salary: NIC now – £304; NIC April 6th – £333; NIC July 6th – £303
- £50,000 annual salary: NIC now – £404; NIC April 6 – £443; NIC July 6th – £413
- £60,000 annual salary: NIC now – £423; NIC April 6th – £472; NIC July 6th – £443
- £70,000 annual salary: NIC now – £440; NIC April 6th – £499; NIC July 6th – £470
- £80,000 annual salary: NIC now – £457; NIC April 6 – £526; NIC July 6th – £497
- £90,000 annual salary: NIC now – £473; NIC April 6th – £554; NIC July 6th – £524
- £100,000 annual salary: NIC now – £490; NIC April 6th – £581; NIC July 6th – £551
Check your tax number
Tax codes are used by your employer or pension fund to calculate how much tax will be deducted from your salary or pension.
It’s made up of numbers and letters that represent how much you can earn before you start taxing – and everyone in the PAYE scheme should have been given one by HMRC.
The most common current tax year code is 1257L for people who have a job or pension – although not everyone will need it.
If you find you have the wrong tax code, it means you may be paying too much tax every month – which could mean you are owed money back.
There are several ways you can find your tax number – the easiest way to check is to look at your most recent payslip or P45.
You can also ask your human resources department if they can provide you with your tax number.
The Gov.uk website has a dedicated web page where you can also see your tax number – to check it online you need to register for a government gateway ID.
For those who have the most common tax code 1257L, this means you could earn £12,570 before being taxed in tax year 2021/22.
But not everyone should be on this tax code — for example, people who have more than one job.
Those who overpaid tax could reclaim thousands of pounds – but it depends on how much you overpaid and for how long.
You can contact HMRC and ask them to investigate by calling 0300 200 3300 or speaking to them online via their live chat service.
Get a lifetime ISA
The deadline to open a Lifetime ISA for the previous tax year has now passed, but you can bring it forward for the new tax year.
If you have a LISA account you can save £4,000 every year and the Government gives you a 25% bonus on top of the money you save.
That means you can get £1,000 free every tax year – or £2,000 free if there are two of you and both have a LISA account, which you can max out.
The bonus is paid into your LISA monthly and your money also earns interest – but you only get a bonus on your contributions, no interest.
You get the bonus even with smaller amounts. So if you can save just £1,000 in a year, the state will give you £250.
You can open a LISA account if you are between 18 and 39 years old and the money can only be used to pay into the first apartment or for retirement provision.
But be warned, if you withdraw your money for reasons other than these, you will lose your bonus and pay a 25% penalty, which is around a 6% loss.
Check your ISA
The start of the tax year is by far the best time to start taking advantage of your new ISA allowance, whether as a lump sum or by setting up a regular direct debit investment.
Sorting it now means your money is instantly protected from taxes and positioned to benefit from rising stock prices.
But first check if an ISA is the best savings platform for you.
ISAs are granted in addition to the new Personal Savings Allowance (PSA) effective April 6, 2016.
If you’re a property taxpayer, you can already earn up to £1,000 tax-free in savings income. For higher taxpayers, that’s £500. That means the majority of people don’t need an ISA to save tax-free.
For example, if your checking account provider has a savings account with a better interest rate, you may find it more convenient to deposit your money there instead. In any case, it is tax-free.
https://www.mirror.co.uk/money/martin-lewis-lists-4-money-26664623 Martin Lewis lists 4 money checks you need to do now and it's about your paycheck