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The Guardian - UK
The Guardian - UK
Business
Hilary Osborne

What is national insurance and should it be scrapped?

UK currency including £1 coins
National insurance contributions raised more than £170bn in the tax year to March 2023. Photograph: Dominic Lipinski/PA

The budget on Wednesday included a further 2p cut in workers’ national insurance contributions (NICs) and the chancellor, Jeremy Hunt, told MPs in his budget speech he wanted to scrap the tax entirely “because we believe that the double taxation of work is unfair, our long-term ambition is to end this unfairness”.

But what exactly is national insurance, what does it pay for and what would be the impact of scrapping it?

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