National Insurance rise U-turn
22nd September 2022 17:10
by Myron Jobson from interactive investor
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interactive investor comments on the announcement from the chancellor.
- The reversal of the 1.25% increase in National Insurance would result in an annual saving of £218 per year for someone earning £30,000, rising to £468 per year for someone earning £50,000, according to calculations by interactive investor.
- Workers with an annual salary of £20,000 would save £93 under the policy, while someone earning £80,000 would be £843 better off - £1,093 for someone on a £100,000 yearly wage.
Salary | 20,000 | 30,000 | 40,000 | 50,000 | 60,000 | 70,000 | 80,000 | 90,000 | 100,000 |
Current NI | 984 | 2,309 | 3,634 | 4,959 | 5,311 | 5,636 | 5,961 | 6,286 | 6,611 |
After NI reduction | 892 | 2,092 | 3,292 | 4,492 | 4,719 | 4,919 | 5,119 | 5,319 | 5,519 |
Tax saving (£) | 93 | 218 | 343 | 468 | 593 | 718 | 843 | 968 | 1,093 |
Source: interactive investor
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor: “Most workers will receive a bumper pay packet in November following the reversal of the 1.25% rise in National Insurance.
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“Scrapping the rise in National Insurance will go some way in easing the cost-of-living squeeze on many household budgets – to the tune of £218 per year for someone earning £30,000, rising to £468 per year for someone earning £50,000. Many lowers earners won’t see a change in their wages.
“Revealing the news on the eve of the emergency mini-Budget suggests that the chancellor could pull an even bigger rabbit out of the hat to further ease the cost-of-living burden on consumers.
“Whether the measures will be enough to pull the UK economy out of the inflation-stoked malaise remains to be seen. The concern is the need to address swelling public debt after the colossal spend on Covid and cost-of-living support measures has been kicked the into the long grass.”
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