Five ways to squeeze extra money out of your wages after Budget tax changes makes it harder than ever to get a pay rise

THE upcoming tax raid on businesses could see workers’ pay stagnate – but there are ways to squeeze the most out of your wages.

The Government is hiking employer National Insurance contributions (NICs) on April 6 from 13.8% to 15%.

Fears have been raised the tax hike will see staff faced with stagnant wages as businesses look to cut costs.

It comes with shoppers already facing price rises after a number of retailers warned they would have to pass on the hike.

Given the context, workers up and down will be worried about their salaries stretching as far in 2025.

However, there are ways to boost your income if you’re facing a salary freeze, including asking for the dreaded pay rise.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, and Danni Hewson, head of financial analysis at AJ Bell, revealed five ways to squeeze the most out of your income ahead of April.

GET YOUR SALARY SURGING

Asking for a pay rise is a daunting task, but going about it in the right way will boost your chances of getting one.

Make sure you’ve got evidence to back up your request though.

This means finding out what other workers in a similar role either at your company, or elsewhere, are getting paid.

To save you asking colleagues, which could ruffle feathers, try websites like Glassdoor or Indeed where you can see how much people get paid for specific roles.

Both have websites or apps which are free to download off the Apple App Store or Google Play.

If, after research, your pay seems reasonable, think about how you might have gone above and beyond in your role over the past year and use that as evidence you deserve a pay rise.

Sarah said: “Any extra projects you worked on, responsibilities you took on or training could help you argue you’re actually doing a more senior job than the one you’re being paid for.”

If your boss refuses, you could try asking for a promotion, if a more senior role is available.

Two final options are to move company, or get a job offer and then go back to your employer and use it to force a pay rise out of them.

But, Sarah warned: “If you plan to do this, you need be prepared to walk away if they refuse to match it, so don’t make empty threats.”

Another option to boost your salary is by earning a second one, Sarah said.

The latest data from the Office for National Statistics (ONS) reveals just over 1.2million people in the UK have a second job.

Sarah said: “There has to be a balance, because if you take on too much overtime or additional jobs you can end up burning yourself out, but it’s worth looking into your options.

“You can also consider whether there are any other ways you can bring in extra cash – and whether a side hustle makes sense.”

We’ve listed off 25 side hustles you can do from the comfort of your sofa and make thousands of pounds.

PASSIVE INCOME STREAMS

Lives are busier than ever, with ONS data published in May 2024 revealing adults were spending less time each day on leisure activities like socialising and watching TV compared to four years before.

But, you can make money without actively working, also known as a passive income stream.

One way to do this, Sarah said, is by renting out a room in your home, either through a lodger or a website like Airbnb.

You can also rent out a parking space in your home or even garage space through websites like Stashbee and YourParkingSpace.

It’s definitely worth renting out your car parking space if you live in an area with limited spots too, as yours will be in high demand.

SELL UNWANTED GEAR

There are an abundance of platforms where you can sell your unwanted clothing, bags and shoes for extra cash.

You can shift old bits and bobs on platforms like Vinted, eBay and Marketplace. But beware some charge you fees.

Etsy charges sellers a 6.5% commission on anything sold on its platform, for example, while eBay scrapped seller fees in October.

If you are selling unwanted goods on these platforms then you won’t be classed as “trading” and liable for tax on any income over £1,000.

But, Danni from AJ Bell said, you will be if you are buying with the intention of selling on.

“Be aware if you buy to sell then you will be liable for tax once you make over £1,000,” she said.

MAX THE TAX

Maximising tax loopholes could be a decent little earner in 2025.

Sarah said one avenue is via the rent-a-room scheme where the first £7,500 earned in rent each year is tax free.

Another, Danni said, was increasing workplace pension contributions to avoid paying more income tax.

You pay income tax on earnings over £12,570 and different amounts based on certain thresholds.

However, increasing salaries but frozen income tax thresholds mean more people are having to pay tax on their earnings than before.

But, you can offset this by adding more to your pension pot meaning your monthly salary is reduced and less money is lost to the taxman.

Danni, from AJ Bell, said: “Paying a bit more into your pension could potentially offset that (income tax) and give your future self a nice bonus.”

It’s worth maximising your ISA allowances as well, as any interest you earn is non-taxable.

This is in contrast to easy-access bank savings accounts where you may to pay tax over your Personal Savings Allowance.

For example, a basic rate taxpayer has to start paying tax on any interest earned over £1,000 a year.

Danni added: “It’s so easy for lifestyle creep to gobble up pounds that would be much better served saving up for a fabulous summer holiday or simply to stop there being too much month at the end of the money.”

STOP KIDDING AROUND

Make sure you’re claiming everything you are entitled to if you have kids.

This might mean claiming 15 or 30 hours free childcare after the government extended the scheme to parents with younger children.

Another way is through tax free childcare where you can get a top up on your childcare payments worth up to £2,000 a year.

A third is child benefit which is worth up to £1,331.20 a year.

However, bear in mind you won’t be eligible for either of the first two if you or your partner earns over £100,000 or the third if you or your partner earns £80,000 or more.

We’ve listed off all the help parents can get with costs, including free childcare hours and uniform grants.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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