Chancellor Rishi Sunak’s plan to dampen the National Insurance tax rise would only save middle income earners £183 a year versus current rules and still leave households hundreds of pounds worse off.

The Government is considering plans to soften the 1.25 percentage point NI increase by raising the thresholds at which people start to pay the tax. Under current plans, the trigger point will be £9,900 from April but reports have emerged over the weekend this will increase to £11,284.

This would offset the higher tax rate for lower earners, meaning no one earning below the median national wage of £27,500 a year would pay more in contributions. This would cost the Treasury about £5bn a year.

However, the burden would fall on millions of workers earning more than £27,500, who would still be forced to pay hundreds extra to the taxman from April. 

Anyone earning £50,000 a year would still be £323 out of pocket, as the Chancellor has put Britain on course for its biggest tax burden in 70 years. If the threshold remains at £9,300 the same worker would pay £506 more a year. 

Mr Sunak will deliver his Spring Statement on Wednesday, when he is expected to set out some measures to help ease the cost of living amid fears inflation could hit 10pc this year. The Chancellor is understood to have accepted that the scale of the Ukraine crisis required a fresh intervention by the Government.