Workers are set to get more money in their pay packets from this week - but the amount people will get back depends on how much they already earn. The decision to reverse a rise in National Insurance payments was taken earlier this year to help people with the cost of living crisis.
In April it was announced that in order to try and tackle the care crisis, a 1.25 per cent ‘Health and Social Care Levy’ was to be brought in and this increase would be added to National Insurance contributions. The care crisis has seen elderly people who have complex needs being unable to get the help they need - including residential placements. It also has led to serious problems at hospitals with patients unable to be discharged as they have nowhere suitable to go.
From Sunday (November 6) everyone will get that 1.25 per cent back in their pay packets after it was reversed in September. According to the government, this means that on average people will see about £330 back in their pay over the course of a year.
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However, how much people get depends on how much their earn - and the change has been criticised because it helps those who earn more the most. Here is a table laying out how much everyone will get, depending on how much they earn:
Yearly salary |
Yearly saving |
£15,000 |
£30.38 |
£20,000 |
£92.88 |
£30,000 |
£217.88 |
£50,000 |
£467.88 |
£75,000 |
£780.38 |
£100,000 |
£1,092.88 |
The government has said that the change will come into effect for most people in this month's wage packets. However it is quite a complex change so it's possible that it could begin next month (December) in some cases, with the pay being backdated. The Levy was expected to raise around £13 billion a year to fund health and social care.
The then Chancellor Kwasi Kwarteng confirmed in September that the funding for health and social care services will be maintained at the same level as if the Levy was in place, protecting the NHS through the winter and ensuring long-term investment in social care. Although, the current government has said it is examining all aspects of funding as the nation faces a squeeze on finances.
Its scrapping is one of few economic policies planned by Liz Truss and Mr Kwarteng that has not been ditched by new chancellor Jeremy Hunt. Around 920,000 businesses will see a cut in National Insurance bills, with 20,000 taken out of paying National Insurance entirely due to the Employment Allowance, which rose in April 2022 from £4,000 to £5,000.
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