Millions of workers have pocketed a much-needed pay rise after National Insurance contributions were slashed by 1.25 per cent on Sunday.
The measure was introduced during Kwasi Kwarteng’s fleeting 38-day stint in the Treasury, and remains as one of the last strongholds of his disatrous mini-Budget, which was reversed almost in its entirety by incumbent chancellor Jeremy Hunt.
The 1.25 per cent hike in NI contributions, which took effect in April, was first introduced by Rishi Sunak during his own term in No 11 at the height of the pandemic, and was intended to pay for the UK’s near-gutted social care system and temper the NHS backlog.
According to financial services experts, the reversal of the levy could see the average worker furnished with a £330 pay boost. Of course, though, however much you benefit from the scheme is dependent on how much you earn.
Notably, those earning below £12,570 a year will not be beneficiaries of the change since they do not pay any NI contributions.
Here, personal finance specialists Hargreaves Lansdown reveals exactly how much more money you will take home per year on the follow salaries:
- £20,000 – £93 per annum
- £30,000 – £218 per annum
- £40,000 – £343 per annum
- £50,000 – £468 per annum
- £60,000 – £593 per annum
- £80,000 – £843 per annum
- £100,000 – £1,093 per annum
When announcing the reversal, the Treasury said most employees will receive a cut to their national insurance contribution directly via their employer’s payroll in their November pay, although some may be delayed to December or January.
This means that the money won’t appear as a lump sum in your bank each year, but in smaller incrementsas part of each month’s pay packet.
Based off the figures above, here is how much more money you will take home per month on the follow salaries:
- £20,000 – £7.75 per month
- £30,000 – £18.17 per month
- £40,000 –£28.58 per month
- £50,000 – £39.00 per month
- £60,000 – £49.42 per month
- £80,000 – £74.42 per month
- £100,000 – £91.08 per month
