National Insurance BOOST: How much is National Insurance? Planned NI increase in full | Personal Finance | Finance


National Insurance is a tax on earnings, which helps pay for a variety of state services. As well as helping to fund the National Health Service (NHS), National Insurance also funds certain services including the State Pension, unemployment and disability benefits.

Will National Insurance increase?

Reports from The Times and The Daily Telegraph suggest the Government is considering a tax rise to pay for social care reforms.

As MPs return from their summer recess soon, an announcement on tax increases could be made as early as next week.

According to reports, increasing National Insurance is the favoured approach for plugging the financial shortfall.

READ MORE: State pension: Rishi Sunak set to scrap triple lock next week

“It’s between five and 10 billion a year for the next three years but then after that, if we were to introduce a cap on social care costs, which is a manifesto commitment, those costs start to kick in a little bit later and that’s why I think the answer is a health and care premium, something that could help relieve the pressure on the NHS in the short term but then move into the transformation of the social care system we need in the more medium term.”

When pressed on what this means, Mr Hunt acknowledged the health and care premium would still be a tax increase.

He added: “It is a tax increase, I don’t think we should call it anything other than a tax increase, but the reason I call it a health and care premium is because I think that’s a better route than National Insurance which, for example, is not paid by working pensioners.

“I think since older people are the biggest beneficiaries of this extra investment it’s fair that they should make a contribution.”

How much is National Insurance?

People who are employed need to pay Class 1 National Insurance contributions.

Class 1 contributions are 12 percent for people who earn £184 to £967 a week, with a rate of two percent for people earning more than £967 per week.

People who are self-employed pay Class 2 National Insurance if their profits are £6,515 or more a year, or Class 4 National Insurance if profits are £9,569 or more a year.

For 2021 to 2022, Class 2 is £3.05 per week, while Class 4 is nine percent on profits between £9,569 and £50,270, and two percent on profits above £50,270.

Different National Insurance rules apply for some people, including company directors, landlords running property businesses and share fishermen.

Source link


Please enter your comment!
Please enter your name here