Lower paid workers are set to get extra pay in their pockets from July 6 due to a change in how National Insurance is calculated. Under the plan announced in March by Chancellor Rishi Sunak, from that date the threshold at which workers start paying National Insurance will increase by £3,000.
It means less of workers’ income will be subject to National Insurance as they will earn up to £12,570 a year before they pay it - a sharp increase from the current rate of £9,880. This is meant to counteract an earlier decision by Sunak to increase income tax contributions by 1.25 per cent to raise money to deal with the huge hole in public finances caused by Covid.
The cost of living crisis including massively increased energy costs for power and fuel led the chancellor to try to help.
