It’ll mean that many of us in work will keep more of what we earn
Those of us in work could be seeing a boost to our pay packet after National Insurance rates were cut this month.
Workers earning £20,000 a year will gain about £93 annually from 2023 because of the move. But the exact amount will depend on what we earn. The more we get paid, the more we’ll gain.
The National Insurance rate was raised by 1.25 percentage points to 13.25 per cent in spring 2022. But now that move has been reversed, and the rate is back down to 12 per cent.
What is National Insurance anyway?
It’s money that comes off our wages and goes to the government to pay for things like benefits and state pensions.
We only start paying when our wages hit £12,570 a year. If we earn under that amount we don’t have to pay it.
For those of us on Universal Credit (UC) as well as our wages, the move is likely to cut the amount of UC we get.
This is because our UC is affected by how much we earn (known as the ‘taper rate’). As this change means we’ll be earning a bit more, our UC amount will come down.
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