National Insurance: How much National Insurance do I pay? Government plans over-40 rise
National Insurance contributions are a hallmark feature of the British welfare state, and see people pay out a set amount of their income each month. Money from the monthly payments go towards social security and entitle people to select benefits. But not everyone pays the same amount, as it varies depending on the paycheque.
How much National Insurance do I pay?
National Insurance is a mandatory payment for people over the age of 16 who meet predetermined criteria.
Employees must earn above £183 per week, while self-employed people must turn a profit of £6,475 or more a year before they start paying national insurance.
The Government has introduced six types of National Insurance; class one, class one a, class one b, and classes two, three and four.
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Employees pay class one, self-employed class two and four (but only if they turn a profit of £9,501 or more a year), and people pay class three voluntarily.
Employers pay classes one a and b on top of their workers’ benefits or expenses.
Payment comes automatically from employee payslips, while self-employed people must do so via a self-assessment.
The National Insurance rate for class one employees earning £183 to £962 is 12 percent.
Those earning in an upper bracket of more than £962 a week pay just two percent.
Married women or widows can get a National Insurance break if they can produce a valid certificate of election.
People deferring their payments may also pay less if they have more than one job.
Recent revelations suggest people aged over 40 may have to pay slightly more to prop up social care for older people.
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The plans, according to The Guardian, could see the Government ask them to contribute towards the cost of care in later life via National Insurance or tax.
The money raised from the policy would go towards help for the frail and elderly to go about their daily lives at their property or a care home.
Boris Johnson’s new health and social care task force and the Department of Health and Social Care (DHSC) will allegedly spearhead the plans, which have gained support as an instrument to solve the social care crisis.
One source with knowledge of the plans told the Guardian the Government is basing the model on others used in Japan and Germany.
They said: “The latest thinking is that there’s a preference for some sort of Japanese-style model where once you are over 40 you start paying into a central risk pool.
The source added: “They are deadly serious about that.”
Officials have not yet announced the changes, so how much more over 40s would have to pay remains to be seen.
The decision may take some time to emerge in any form, however, due to “vast differences of opinion” in Government.
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