Pay day can’t come soon enough
Millions of Brits are set to see more money going into their account on pay day this week following changes made to the workers’ National Insurance (NI) contributions.
It is estimated that around 30 million workers will be able to keep more of their wages this month thanks to the changes made to NI which aims to lower taxes by approximately £6bn, leaving many workers with less immediate outgoings from this July payday onwards.
According to the UK government, the adjustment is expected to save people earning more than £12,750 up to £330 a year but the actual figure will depend on how much you make. The changes to the national tax scheme have been phasing in since July 6, taking in account the new Health and Social Care levy.
At present, employees can earn up to £9,880 before need paying NI but as of midnight tonight that amount jumps up to £12,750, meaning that not only will millions have to pay less on average but approximately 2.2 million people will be free from NI contributions entirely.
In contrast, those on higher wages are expected to end up paying more NI overall; Martin Lewis and his Money Saving Expert team have put together a simple payday calculator which can help you determine how much you will be saving on your monthly earnings following the changes to National Insurance.
After overall taxes were hiked up to the highest rate in 70 years, including National Insurance specifically, earlier this year, Lewis labelled the current cost of living crisis “the worst in 22 years” – including the 2007 crash.
Moroever, while many UK household are expected to receive £400 in energy bill discounts this autumn, the average person’s living costs continue to spiral out of control. While a reduction in NI contributions should help in the short term, there’s plenty more to be fixed before the country’s economy stabilises.
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