Published On: Sat, Feb 5th, 2022

Martin Lewis clears up 10.4% NI rise – taxpayers to pay hundreds more every year | Personal Finance | Finance


The Gov.uk website states that National Insurance will be increasing by 1.25 percent this year. However, the rise is a 1.25 percentage point increase applied to existing National Insurance rates – not a percentage increase on those rates.

As such, most people will see a 10.4 percent increase in the amount of National Insurance they pay from April 2022.

This is because a tax rate is itself a percentage and percentages are often said to rise by percentage points.

On Twitter, the cash-saving expert remarked: “I asked @hmtreasury to change misleading http://gov.uk info about the NI rise ‘increasing 1.25%’. It’s not. For most it’s increasing from 12% to 13.25% – a 10.4% increase or a rise of 1.25% points. Pleased to say it’s listened & changed it.”

Martin Lewis has over 1.3 million followers on his Twitter social media account.

He is often considered to be the go-to person for money saving insight in the UK.

From April 6, 2022 to April 5, 2023 National Insurance contributions will increase by 1.25 percentage points in the UK.

With the new NI increase, an employee earning £20,000 a year will pay an extra £89.

Put into perspective, someone on £50,000 will pay an additional £464.

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The Government has said that the changes are expected to raise £12billion a year to help support the NHS.

A proportion of the funds will be put towards the UK’s social care system.

From April 2023, National Insurance will go back down to 2021 to 2022 levels.

The levy will then become a separate new tax of 1.25 percent, collected as a new Health and Social Care Levy.

Many have argued that the rise will have a greater impact on lower-income earners.

Business leaders have also warned that firms could offset the rise by hiking up prices for consumers.

Campaigners have urged the Government to scrap the NI increase at a time when households are already struggling with rising energy bills and living costs.

National Insurance contributions (NICs) are a tax on earnings and self-employed profits.

It is paid by employees, employers and the self-employed. National Insurance contributions can help to build a person’s entitlement to state pension and other benefits.



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