Historic National Insurance Cut Now in Effect!
How This Change Boosts Your Earnings
Great news for workers across the UK! The National Insurance rate has been reduced, meaning you get to keep more of what you earn. This cut is part of the government's commitment to supporting individuals and families.
What's Changed?
The main rate of primary Class 1 National Insurance contributions has been cut by 2 percentage points, from 12% to 10%, starting January 6, 2024. This means significant savings for employed individuals and crucially, more money earned staying in your pocket!
For the self-employed it will reduce the main rate of Class 4 National Insurance contributions by 1 percentage point, from 9% to 8%, and remove liability to pay the weekly Class 2 flat rate for those with profits above £12,570 from 6 April 2024, while ensuring they will retain access to contributory benefits including the State Pension (as is currently the case).
Those with profits under £6,725, who pay Class 2 National Insurance contributions voluntarily, will also retain access to contributory benefits including the State Pension.
Your Savings Explained
Here’s a quick estimate of annual savings for various professions:
An average employee on £35,400 will receive a tax cut in the 2024 to 2025 tax year of over £450, and an average self-employed person on £28,200 will save £350 in the 2024 to 2025 tax year. Actual impacts for individual taxpayers will vary according to individual circumstances.
Calculate your Savings*
Benefits of the Cut
- 27 million people across the UK will benefit.
- The average worker on a salary of £35,400 will save around £450 this year.
- The cut is part of a broader government effort to reduce taxes and support economic recovery.
FAQs
1. Who benefits from this cut?
Most employees will see reduced National Insurance deductions.
2. When will I notice the difference?
The changes are effective from your next paycheck post-January 6, 2024. (The reduction in the main rate of Class 4 National Insurance contributions and removal of liability for self-employed people to pay Class 2 National Insurance contributions will take effect from 6 April 2024.)
3. Income tax in Scotland is devolved - will this cut affect me here?
Yes! This national insurance cut will apply to workers across the United Kingdom!
Sources:
https://www.gov.uk/government/publications/changes-to-national-insuranc…;
* savings calculated are estimates only and will vary according to individual circumstances.