‘Difficult months ahead!’ National Insurance to rise this week – how much will you pay?

New research from Nerdwallet has found that when the tax rise was initially announced, around 67 percent of households were already struggling with their budgets. The personal finance company believes many people in the country will “face difficult months ahead” due to the changes to National Insurance. With inflation and energy bills soaring, the National Insurance increase is set to add further pressure to those who are already finding it difficult to make ends meet.

National Insurance will increase to 13.25 percent for people earning between £184 and £967 a week later this week.

These changes will be implemented by the Government on April 6, 2022 and will return to current levels on April 5, 2023.

As a result, anyone who earns more than £9,880 a year will pay 1.25 pence more in the pound. However, from July the point at which employees start paying will increase to £12,570.

Under the new plans, people on these salaries will see their National Insurance rise by the following amounts:

£20,000 – will pay an extra £130 a year (£10.80 per month)

£30,000 – will pay an extra £255 a year (£21.25 per month)

£50,000 – will pay an extra £505 a year (£45.80 per month)

£80,000 – will pay an extra £880 a year (£73.33 per month)

£100,000 – will pay an extra £1,130 a year (£94.16 per month)

READ MORE: State pension to hit £10,340 as triple lock saved – some get less

Recently, Rishi Sunak announced the National Insurance threshold would rise by £3,000, which will mean some households will not have to pay as much in National Insurance.

In his Spring Statement to the House of Commons, Mr Sunak referred to the decision as the “largest personal tax cut in a decade”.

However, this will not come into effect until July which means lower income families face higher National Insurance for a couple of months.

Connor Campbell, a personal finance expert at NerdWallet, warned Britons about the dangers of being unaware of how the upcoming tax changes will affect their households’ budgets.

Workers pay National Insurance via their wages, while their employers make contributions on their behalf.

People who are self-employed pay National Insurance on any profits that they make.

It should be noted that the Chancellor has promised to return the rate of National Insurance to what it currently is at in April 2023.

However, by that point, taxpayers will have to pay the extra Health and Social Care Levy on top of making National Insurance contributions.