National Insurance set to rise in 2022 !
Britons are bracing themselves as National Insurance payment contributions are set to rise as soon as next year.
The Government has confirmed a 1.25 percent Health and Social Care Levy will be introduced, temporarily via National Insurance (NI) payments before being separated into its own tax. This additional levy has been created to help pay for the country's crippling social care sector which has been hurt by the pandemic. As a result of this, employees, businesses and the self-employed will need to pay more NI which is set to jump by 1.25%.
Overall changes to NI mean that contributions will be hiked from its current level of 12 % to 13.5% as of April 2022.
Taxpayers can expect larger reductions in their pay cheques as a result of the Government's drastic changes to NI.
Chancellor Rishi Sunak confirmed the Treasury's National Insurance hike ambitions in his Autumn Budget announcement earlier this year.
Ahead of pending NI rise, here is a breakdown of how much people in certain salaries will pay once Mr Sunak's changes are implemented.
Average Salary and new NI payments
will pay an extra £130 a year (£10.80 per month)
will pay an extra £255 a year (21.25 per month)
will pay an extra £505 a year (45.80 per month)
will pay an extra £880 a year (73.33 per month)
will pay an extra £1,130 a year (£94.16 per month)
National Insurance contributions is a tax levied on employers, their workers and those who are self-employed on their wages.
Payments of NI go towards paying for the NHS, as well as the person's ability to access benefits and the state pension.
O'Donnell, P., 2021. 'Can't blame Britons for fretting!' National Insurance warning as payments to rise in 2022. [online] Express.co.uk. Available at: <https://www.express.co.uk/finance/personalfinance/1533000/national-insurance-ni-payments-rate-contributions-UK-2022> [Accessed 20 December 2021].