From July 6, changes are being brought in on how National Insurance is calculated - and this means lower paid workers are set to get extra money in their pockets. 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. It has been estimated that 30 million workers will benefit and an extra 2.2 million people will not have to pay NI at all. The Government website has a special tool on it for people to input key wage information and then it will give you an estimate of how much less you’ll pay. To use it click here.
