So just how bad will it really be?

All pain and no gain as Tories try to sort out their mistakes

- GRAHAM HISCOTT

THERE were few winners and many losers in the Budget.

Soaring inflation will squeeze most households’ finances, just some more than others, depending on people’s circumstances.

Here we explain what it means, from what you pay in income tax to energy bills, pensions and rents.

Q Can I expect to pay more tax?

For most workers, yes. You start paying income tax when you earn more than £12,570 a year. Bands start at 20%, rising in stages to 45% for earnings above £150,000 a year.

These thresholds would normally increase in line with inflation. The plan was already to freeze them until April 2026, but that has been extended by two years, meaning more people will be dragged into each band because of wage rises.

The 45% rate threshold will fall to £125,140 which, according to the Institute for Fiscal Studies, will take in an extra 350,000 big earners.

Accountants Deloitte say someone earning £25,000 per annum will typically pay £580 extra income tax in 2027/28, while someone on £65,000 will be paying about £2,940 more.

Q What about low earners?

The National Living Wage – the minimum for those aged 23 and above – rises to £10.42 from April.

The Treasury says the 9.7% rise will mean more than £1,600 a year for a typical full-time employee, benefiting two million workers. It will also mean an average £134 a year pension boost to those on auto-enrolment.