Published On:

Pay slip alert over crucial change set to hit within days affecting 27million | Personal Finance | Finance

Share This
Tags


The upcoming 2p cut to National Insurance will see the average worker save around £450.

Earlier this month Chancellor Jeremy Hunt announced in his Spring Budget a cut in the National Insurance starting rate from 10 percent to eight percent, affecting 27 million workers.

According to Mr Hunt this will equate to a saving of £450 a year to an employee with an average salary of £35,000.

The Chancellor also announced a cut to the National Insurance paid by self-employed workers, which will see their rate decrease from eight percent to six percent and result in a saving of £350 for those earning an average of £28,200.

These cuts will come into effect on April 6 and follow in the footsteps of similar cuts from 12 percent to 10 percent that were introduced January 6.

According to the government these two cuts in combination will save the average worker a total of £900 a year.

For people with one job and no untaxed income, unpaid tax or taxable benefits (tax code 1257L) could save between £200 and £750 depending on where your salary falls between the minimum salary of £12,750 and the maximum of £50,270.

National Insurance is not paid on annual earnings under £12,750 and there is a two percent National Insurance rate on earnings over £50,270.

National Insurance payment changes depending on salary are as follows:

  • £20,000: NI payment from April 6 will be £594.40 a year, £297.20 less than the previous year.

  • £25,000: NI payment from April 6 will be £994.40 a year, £497,20 less than the previous year.

  • £30,000: NI payment from April 6 will be £1,394.40 a year, £697.20 less than the previous year.

  • £35,000: NI payment from April 6 will be ££1,794.40 a year, £897.20 less than the previous year.

 

These savings equate to average weekly salary savings ranging from £24.77 for those earning £20,000, to £74.77 for those earning £35,000.



Source link