National Insurance explained: When your pay could change and how much more you could get

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From July 6, changes are being brought in on how National Insurance is calculated. This means lower paid workers are set to get extra money in their pockets as less money will be subject to National Insurance.

It has been estimated that 30 million workers will benefit and an extra 2.2 million people will not have to pay National Insurance at all.

The Government website has a special tool on it for people to input key wage information and then it will give you an estimate of how much less you’ll pay.

Mr Sunak confirmed that the primary threshold for the main rate of National Insurance will jump from £9,880 to £12,570 from July 6, 2022.

The announcement came amid the cost of living crisis, with many families on low incomes feeling the squeeze amid increasing bills.

According to the Government, this tax change will benefit around 30 million, resulting in an overall tax saving of around £330 on average.

People should see the change in their first pay check after July 6 when it takes effect.

Some employees will no longer be paying National Insurance contributions at all.

Some could save hundreds of pounds while higher earners will only save £10.

Estimates from The Sun show that these are the changes people could see to their National Insurance payments each year:

  • £10,000 – Currently paying: £43.35. New estimate: £0. Savings: £43.35.
  • £15,000 – Currently paying: £658.98. New estimate: £321.12. Savings: £337.86.
  • £20,000 – Currently paying: £1,274.61. New estimate: £983.64. Savings: £290.97.
  • £25,000 – Currently paying: £1,890.16. New estimate: £1,646.16. Saving: £244.
  • £50,000 – Currently paying: £4,968.36. New estimate: £4,958.64: Saving: £10

What is National Insurance?
National Insurance is a tax on earnings paid by employees, employers and the self-employed.

Employees pay National Insurance on their wages. Employers also pay extra National Insurance contributions for staff and the self-employed pay National Insurance on their profits.

Every UK citizen receives a National Insurance number automatically before turning 16.

The number helps the Government track one’s earnings and ensures people pay the right amount of tax.

Employees pay 13.25 percent on earnings between £9,564 and £50,268. If they earn over £50,268 they’ll be taxed an extra 3.25 percent.

People can find out how much they’ve been taxed by checking their pay slip each month.

To help households with the cost of living crisis, the Government announced a package of measures to help people.

The Chancellor Rishi Sunak announced that Britons will get £400 off their energy bills as part of a £21billion cost of living support package.

Additional payments of up to £650 will be given to those most vulnerable, pensioners or disabled people.

These payments are grants, not loans and therefore don’t need to be paid back.

This package was announced after it was revealed that energy bills are expected to rise up to £2,800 in October.

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