BORIS Johnson announced yesterday, Tuesday, that National Insurance (NI) contributions would increase by 1.25 per cent - despite previously promising not do to so.
The prime minister went back on his election promise by raising national insurance contributions to deal with the backlog in the NHS built up during Covid and to deliver long-overdue reform of the social care system in England.
What did Boris Johnson announce?
A UK-wide 1.25 per cent health and social care levy based on National Insurance (NI) contributions will be introduced, ringfenced for health and social care.
It will also apply to people working above the state pension age.
The UK Government will increase dividend tax rates by 1.25 per cent to help fund the package.
Boris Johnson said the state should target its help at protecting people against the “catastrophic fear of losing everything to pay for the cost of their care”, adding: “That is what this Government will do”.
Although only England's social care sector will benefit, the devolved governments will be in line for extra funding as a result.
How will the National Insurance rise affect my payslip?
Additional contributions will be shown on payslips.
A typical basic-rate taxpayer earning £24,100 will contribute around £180 in 2022-23, while a typical higher-rate taxpayer earning £67,100 will contribute £715.
Someone on a £50,000 salary, meanwhile, could pay just over £500 more in annual NI contributions next year, while an earner on £20,000 could pay an extra £130.
A worker on £100,000 could see their contributions increase by more than £1,000 next year while someone on £30,000 could see contributions increase by around £250.
Who will not have to pay extra?
The government said the progressive nature of the levy meant that 6.2 million people earning less than a threshold of £9,568 in 2021-22 will not pay the levy.
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