The occupations affected by the Budget
15 Apr 2024
Daniel Muir, former IES Research Economist (Fellow)
This blog was originally published in March 2024 on the website of Adzuna, one of the largest online job search engines in the UK.
Earlier this month the Chancellor produced his Spring Budget. The main discussion around the measures announced centred on the tax cuts, with the government and opposition parties going back and forth on whether taxes were falling or rising and over what period we should look at. There was also a lot of debate (as always) around the other measures announced, including around non-dom tax status and tax on vapes.
We take a look at three policies announced (or rather in one case, not announced) in the Budget, and using our vacancy data look at the kinds of jobs that will have been affected. To do this, we use Adzuna’s intelligence portal, the proprietary dashboard that displays a wide range of aggregate data based on all the vacancies on their site.
For more detailed information on all the announcements, take a look at the BBC’s coverage of the budget, or the analysis by independent research organisations like the Resolution Foundation or the Institute for Fiscal Studies.
Cut to National Insurance
The headline policy announcement from the Chancellor was a cut in the rate of National Insurance (NI).
For employees paid between £12,571 to £50,270 a year, the rate of NI rate is being cut to 8%, down from 10% pre-Budget and from 12% prior to January this year. Employees then pay 2% on earnings above £50,270.
The BBC produced the chart below showing what this rate cut translates to for a range of different salaries.
So, this means that someone earning £25,000 a year would save an additional £249 from the further rate cut announced in March.
Taking a look at our vacancy data over the year to March 2023, we can see that for vacancies with an advertised salary of £25,000 the most common occupation (based on the Standard Occupational Classification) was book-keepers, payroll managers and wages clerks, with approximately 6,000 vacancies at this pay rate.
Rounding out the top three most common occupations were business sales executives and human resources and industrial relations officers, with approximately 3,500 and 2,800 vacancies paying £25k a year each.
The occupation where £25,000 was the most common advertised salary across the year was dispensing opticians, for which 10% of vacancies had salaries of £25,000. So, these are the sorts of occupations that will be saving about £250 a year on average in NI from the cut from 10% to 8% in the rate.
Vacancies paying £25,000 are most commonly for associate professional roles (30%) and administrative and secretarial roles (24%), which make up a much greater share of these below average paying vacancies (median salary across all vacancies across the last year was approximately £32,000) than they do for all vacancies (17% and 6% respectively).
Continued freeze in income tax thresholds
The thresholds at which individuals pay the various rates of income tax remained frozen again, as they have done since 2021.
This freeze in the tax thresholds is often described as a “stealth tax” – as incomes tend to rise over time in nominal terms, frozen tax thresholds mean that more individuals and a greater share of incomes moves into higher tax bands, increasing the amount of tax individuals actually pay.
The table below shows the different thresholds at which the four income tax bands apply.
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
So let’s have a look at which sorts of jobs will have moved into higher tax bands since March 2021 when the current thresholds were introduced. We look at the data for the year to March 2021 and compare it to the year to March 2024.
Of the 401 different occupations that there is data available for on average salaries March 2020 – Feb 2021 and March 2023 – Feb 2024, the median salary is in a higher tax income tax bracket for 20 of these (5%).
One example of these occupations is midwifery nurses. In the year to March 2021, the median advertised salary for a midwifery nurse was £36,453, which would have made the prospective employee a basic rate payer and they would have paid £4,777 in income tax. By the year to March 2024, the median advertised salary had increased to £52,819, an approximately 45% increase in salary. However, due to the frozen income tax bands, the income tax paid by the prospective midwifery nurse, now a higher rate taxpayer on additional income above the £50,270 threshold, would increase to £8,560, meaning a 79% increase.
The occupations that see the biggest rises in taxes paid on a median salary vacancy include aircraft pilots and air traffic controllers (£9,546), welfare professionals n.e.c. (£9,502) and dental practitioners (£6,472).
Of course, this data covers vacancies and not employees. And changes in the composition of vacancies by occupation across grades and seniority level will also lead to changes in the median salary of vacancies for an occupation aside from any true growth in average salaries. But this gives an idea as to some of the effect of freezing income tax thresholds on the amount of tax paid.
In the case of the average midwifery nurse vacancy, had the income tax thresholds increased in line with inflation (calculated using the CPIH rate available to January 2024), the prospective employee would be paying £975 less in income tax, and they would still be a basic rate tax payer.
Increase to child benefit threshold
Lastly, the income thresholds at which parents lose their child benefit have been increased.
Parents will now start losing their entitlement once at least one parent earns over £60,000 a year compared to £50,000 previously, and the entitlement will be removed all together at £80,000 a year instead of £60,000 a year. Again, we look at which sorts of jobs will be affected by these changes.
The most commonly demanded occupation both among those paying £50-60,000 (i.e., affected by the change in threshold at which child benefit begins to be withdrawn) and among those paying £60-80,000 (i.e., affected by the change in the threshold at which child benefit entitlement is removed altogether) is programmers and software development professionals, with around 26,000 and 35,000 vacancies within each of the salary bands respectively.
The occupations where the highest proportion of vacancies pay £50-60,000 are charitable organisation managers and directors (28%), garage managers and proprietors (26%) and construction project managers and related professionals (21%).
For the £60-80,000 band, these are head teachers and principals (39%), welfare professionals not elsewhere classified (27%) and garage managers and proprietors (21%).
Unsurprisingly giving that these pay ranges are significantly above average, the occupations affected are naturally more heavily weighted towards higher skilled, more senior ones. 55% of vacancies paying £50-60,000 are professional occupations, whilst they make up 64% of those paying £60-80,000.
Less than 3% of the listings paying in either of these ranges are for the three lowest skill, least senior groups of occupations – sales and customer service occupations; process, plant and machine operatives; and elementary occupations.
Any views expressed are those of the author and not necessarily those of the Institute as a whole.