Millions of UK workers to get £330 cash boost from next month - see who it affects

Millions of workers will be around £330 a year better off as a cut to National Insurance (NI) comes into effect from next month.

Certain NI contributions paid by both employed and self-employed workers will fall by 1.25 percentage points from November 6.

It means that, over a certain threshold, you will pay 12% in NI instead of the current rate of 13.25%.

The lowering of NI contributions reverses a hike that was introduced by the ex-Chancellor Rishi Sunak

The Government claims 28million people across the UK will now keep an extra £330 a year on average in the 2023/24 tax year.

Here we explain the NI changes in full.

National Insurance is changing from next month (PA)

What is National Insurance?

National Insurance is a tax on earnings and self-employed profits above a certain threshold.

Your contributions qualify you for benefits and the state pension in later life.

Once you reach state pension age, you no longer need to keep paying NI.

If you are employed, rather than self-employed, you'll pay Class 1 contributions.

You start to pay NI once you earn above £12,570 before tax.

The rate will go down to 12% on earnings between £12,570 and £50,270 from November 6.

You currently pay 3.25% on earnings over £50,270 but this will drop to 2%.

The rules are different for self-employed Brits - unless you are self-employed but have an employer.

If you are fully self-employed, you start to pay Class 2 contributions when your profits are above £6,725.

This is a fixed weekly amount of £3.15.

You'll pay Class 4 contributions if you're fully self-employed and your profits are £11,909 or more a year.

Class 4 contributions are charged at 10.25% on profits between £11,909 and £50,270, then 3.25% on profits over £50,270.

How much will you save?

The exact amount that you will save through the reduction in NI contributions will depend on how much you earn.

Personal finance specialists at Hargreaves Lansdown have worked out how much people will save based on their earnings.

• Workers on £20,000 will save £93 a year
• Workers on £30,000 will save £218 a year
• Workers on £40,000 will save £343 a year
• Workers on £50,000 will save £468 a year
• Workers on £60,000 will save £593 a year
• Workers on £80,000 will save £843 a year
• Workers on £100,000 will save £1,093 a year