Millions of workers will see a welcome boost in their pay packets tomorrow as the cost of living crisis continues to bite.

This is because the National Insurance (NI) threshold is set to increase from £9,880 to £12,570.

The government says this will benefit 30 million people across the country, with the average person saving £330 a year from July.

It comes after the energy price cap was increased by £693 back in April, spiralling bills for 22 million customers.

People earning £31,500 or less will be better off under the new system, according to analysis by AJ Bell, although the lowest earners may not meet the threshold for paying NI.

It also means 2.2 million more people will now be exempt from paying NI altogether.

However, personal finance analyst Alice Haine said a £330 saving ‘won’t stretch far when you realise that only equates to £27.50 a month’.

She said: ‘Yes, every penny counts in this cost-of-living crisis and for some, that £27.50 could be the difference between having dinner every night and sometimes going without.

‘For others, however, that amount will barely make a dent in their budgets as they struggle to pay the household bills amid rampant inflation as soaring food, fuel and energy prices become the norm.’

‘All of this is set against a backdrop of falling real wages where runaway inflation is eroding any pay uplift workers receive, so any saving will quickly be swallowed up,’ she added.

People across the country are struggling as frozen income tax thresholds push more people into paying higher tax bills.

Nearly two million higher and additional rate taxpayers have been created in the space of three years, according to HMRC figures.

This means 6.1 million people will be paying income tax rates at the higher rate of 40% or the additional rate of 45% in 2022/23.

Compare this to 2019/20, the total combined number was approaching 4.3 million.

Personal finance analyst Sarah Coles said: ‘Unfortunately, as time goes on, the tax burden is going to grow.

‘The frozen tax thresholds until 2026 mean that as wages gradually increase, the taxman is (syphoning) off more and more of your cash.’

Ms Coles added: ‘Any saving will be welcome right now, but it’s going to be a drop in the ocean.

‘Someone paying £10 or £20 less in tax each month isn’t going to notice once they’ve factored in the rising cost of everything from energy to food and fuel.’

Inflation is expected to top 10% in the months ahead, exerting further pressure on households.

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