Experts warned that the national insurance increase will add to families’ suffering from rising bills.
Cost rises continue to wreak havoc on households, while wages and pensions fail to meet inflation.
Analysts say April’s tax grab – which will strip the average family of £600 a year – could prove too much for many.
Analysis for the Daily Mail by the Centre for Economics and Business Research revealed on Monday that households were facing extra costs totalling £2,440 compared with before the pandemic. But at the same time, the Chancellor Rishi Sunak’s extra national insurance burden will take more money out of employees’ pay packets
Most household budgets are being hit hard by the current energy crisis, which has caused bills to rocket.
The price cap, which dictates how much suppliers can charge, has already risen by more than £100 but is predicted to surge by another £600 in April.
Inflation reached 5.4 percent, its highest point in thirty years. However, economists expect it to reach at least 6.4% in April.
Analysis for the Daily Mail by the Centre for Economics and Business Research revealed on Monday that households were facing extra costs totalling £2,440 compared with before the pandemic.
But at the same time, the Chancellor’s extra national insurance burden will take more money out of employees’ pay packets.
Workers will have to pay 1.25pence more per pound for the hike. It will cost someone earning £30,000 around £255 a year, and a worker with an £80,000 salary £880 a year.
Labour Shadow Chancellor Rachel Reeves said: ‘Working families are already feeling the crunch. But the triple whammy of an imminent rise in the energy price cap, real wages falling and tax rises coming down the tracks are going to make this crisis even worse.’
Laura Suter, head of personal finance at investment firm AJ Bell, said: ‘While the Government wouldn’t have planned it this way, the national insurance hike now looks very poorly timed as it comes in the same month as energy bills are dramatically increased once again, on top of record-breaking inflation and rising living costs.
‘We’ve already seen a rise in the number of people using credit cards and other borrowing and once April hits we’ll likely see many more families already struggling, even before they’re faced with a tax rise.
‘The national insurance increase means that many people will lose hundreds of pounds from their take-home pay, which could be the straw that breaks the camel’s back for some families.’
Economists believe that the Bank of England would raise the base interest rate even more this year. That will drive up the mortgage costs for millions.
A 1 percentage point increase would add more than £2,000 to the annual cost of a £300,000 mortgage at the average standard variable rate of 3.74 per cent.
Our savings are being eroded by inflation. With the average interest rate paid on nest eggs now a pitiful 0.1 per cent, every £10,000 put away will be worth only £9,470 in real terms after a year – a loss of £530.
Inflation has also been a problem for wages, which have fallen by 1% in real terms, according to figures this week.
Britain’s 12million pensioners are facing cuts in real terms after the Government abandoned its triple lock promise to increase rates by the highest of either inflation, earnings or 2.5 per cent.
Mail analysis shows that fuel and food prices are rising faster than inflation.
The consumer price index reached 5.4 percent this week. However, Hargreaves Lansdown’s analysis revealed that the basic rate was 6.1%.
Petroleum prices rose 28 percent, from 114.1p/litre to 145.8p per year. Rail fares will also rise by 3.8 per cent in March, adding £114 to a £3,000 season ticket.
Sarah Coles of Hargreaves Lansdown said: ‘Rapid rises in essentials should ring alarm bells, because while we can cut back on the little luxuries in life to make ends meet, there’s far less we can do about the cost of things we can’t live without.’
This is another great kick following the pandemic.
Ellie McCann faces paying an extra £318 a year in national insurance if the tax increase goes ahead.
The 27-year-old marketing consultant has already seen her energy costs rise by around £50 a month.
She expects her rent will rise in the near future.
She welcomed the Daily Mail’s campaign to stop the rise going ahead.
Miss McCann, pictured, from Manchester, said: ‘An extra £300 a year is a big increase in my outgoings.
Ellie McCann faces paying an extra £318 a year in national insurance if the tax increase goes ahead
‘We’ve just come out of this horrible experience of the pandemic and just as life is starting to get back to normal it feels like another kick.
‘It’s hard to see how I can keep up with all these financial pressures.
‘With energy bills and food shops rising it doesn’t feel like the right time to be adding such a big expense to people’s bills.’
This will add £1,000 a year to our bills
Suzanna Samaka, her family and their higher-income income are feeling the pinch.
If the national insurance rise comes in they face paying an extra £1,000 a year.
With her partner Steve Owen, 51, Miss Samaka shares Enya, her two-year-old toddler, with Betsy, Betsy, 16 weeks.
Suzanna Samaka’s family is a household with a greater income, but are already struggling to make ends meet.
She said: ‘Now just doesn’t feel like the right time for the Government to increase any more taxes. Our food prices have risen and energy costs are increasing.
‘It feels like the Government should be helping out, not adding to our bills. We’ve always been responsible with our money, and have enough savings to make it through.
‘But we’re still very worried. It’s hard to see how lower-income families will cope.’
Miss Samaka works for a bank and founded #honestyaboutediting, a campaign for more transparency around edited online content. She and her partner have a shared income of around £100,000 a year.