National Insurance update: Increase to go ahead in April despite cost of living crisis
Martin Lewis discusses the National Insurance increase
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Prime Minister Boris Johnson is pressing ahead with the tax hike he says is necessary to pay for social care and the NHS. The rise will mean workers, the self-employed and employers will see their National Insurance contributions rise by 1.25 percent from April. How will the increase affect your pocket?
The tax will also need to be paid by people over state pension age.
How much extra will I have to fork out?
Workers will see their contributions go up an additional £130 if they pay more than £20,000.
Those earnings over £30,000 and £50,000 will see their National Insurance payments increase by £255 and £505 annually, respectively.
Anyone who gets £80,000 or more a year will have to pay an extra £880 in National Insurance during 2022.
For anyone earning over £100,000, their National Insurance contributions will soar by £1,130.
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Britons are being asked to find more money for taxes while at the same time the cost of living is squeezing their pockets.
The Institute for Fiscal Studies (IFS) said the problem is that while everyone is seeing the cost of everything increase, it’s not matched by benefit rises or pay increases.
Robert Joyce, deputy director at the Institute said people on benefits are struggling.
He said: “Doing so would compensate benefit recipients on average for higher costs, including energy costs.”
Mr Joyce continued: “This need not be a permanent increase.
“Future up-rating can be adjusted once inflation has fallen back.”
Meanwhile, families could get up to £100 in free cash from their local council as part of the Household Support Fund.
Some local authorities have already sent letters out to households it thinks could be eligible.
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It’s worth getting in touch with the local council if anyone is struggling and hasn’t received a letter.
How much people can get depends on their local authority.
However, in some parts of the country people have reported being offered £100.
Chancellor Rishi Sunak established the Household Support Fund in his last Budget as a way to help households during the pandemic.
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