How much is National Insurance going up – and when?

The government is pressing ahead with plans to increase National Insurance, despite rising concerns about the cost of living crisis facing millions of people across Britain.

Both Prime Minister Boris Johnson and his Chancellor, Rishi Sunak, have defended the planned hike in National Insurance, which they say is necessary to provide extra funding for health and social care – which have been under severe strain during the pandemic.

Labour, as well as some Conservative MPs, have urged the government to reconsider the increase. But exactly how much is National Insurance going up by – and when?

READ MORE: National Insurance: who pays it, what it pays for, when it’s going up – and how much more you’ll be paying

How much is National Insurance going up?

National Insurance is due to go up by 1.25% – which means workers will pay an extra 1.25p in every pound of their earnings.

This might not sound like much, but it soon mounts up. In fact, the average worker is expected to pay another £255 in NI contributions over the coming tax year.

Workers paid £20,000 a year will pay an extra £89, while those on £30,000 will pay a further £214 a year. Someone on a salary of £50,000 a year will pay £464 more.

However, those paid less than £9,880 a year (£823 a month) do not pay National Insurance and, therefore, will not be affected by the NI hike.

When is National Insurance going up?

The National Insurance hike will come into effect on April 6 this year – the start of the 2022-23 tax year. It will end on April 5 2023.

While the increase to National Insurance will only apply for the 2022-23 tax year, it will be replaced by a new 1.25% Health and Social Care Levy from April 2023 onwards.

What is the Health and Social Care Levy?

the Health and Social Care Levy is a new tax that will be introduced in April 2023. It will be levied at the same rate as the National Insurance hike – that is, 1.25%.

After April 2023, National Insurance will revert to its 2021-22 level, with the extra 1.25% being collected as part of the new Health and Social Care Levy instead.

People of state pension age will not be liable for the NI increase as they do not pay National Insurance, but they will be liable to pay the Health and Social Care Levy once it’s introduced next year.

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