In total, about 30 million people are expected to benefit from the threshold increase, which was introduced to help with rising costs. But the savings will be offset by the National Insurance contribution increase in April, which went up by 1.25 percentage points to tackle the NHS and social care backlog.
How much money will you save?
The National Insurance threshold increase will benefit low-income earners the most.
According to Gov.uk, someone on a salary of £20,000 will be £291 better off over the year.
Savings decrease as salaries go up, and someone earning £25,000 will pay about £244 less thanks to the new changes.
READ MORE: Nadhim Zahawi net worth vs Rishi Sunak net worth
Anyone earning £30,000 will pay £197 less, and those on higher salaries of £40,000 will pay about £103 less over the year.
The UK’s highest earners will pay more into the system, effectively offsetting the savings afforded to the lowest earners.
Those who take home £60,000 per year will pay roughly £84 more than in 2021.
However, these figures are just estimates, and the true amount of money saved will be visible on payslips from today.
However, with rising energy costs, inflation, and fuel prices, MPs called for former chancellor Rishi Sunak to do more to help British households.
He responded by raising the earnings threshold, a policy which takes effect from today.
Another change is coming in April 2023, when National Insurance rates return to their previous level before the temporary hike.
In March, Labour’s Shadow Chancellor Rachael Reeves urged the Government to cancel the temporary National Insurance hike, saying it “will cost families an average of £500 per year”.
The Government defended the policy and stressed the need to tackle long NHS and social care waiting lists.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.