Boss offers pay rise to beat National Insurance rise to try stop staff worrying | Personal Finance | Finance

From April 6, 2022 to April 5, 2023 National Insurance contributions will increase by 1.25 percent in the UK. This will be to fund the National Health Service (NHS) and social care following increased pressure from the coronavirus pandemic.

Edward Newman, CEO of the marketing company 71a, decided to boost pay out of concern for his employees.

He told Gloucestershire Live: “I understand why National Insurance contributions need to go up this year, but I didn’t want to see my team under financial pressure.

“This increase, coupled with the massive hike in energy and food bills, means that they have to consider cutting back on certain things – I don’t want them worrying.”

Mr Newman continued: “For some employees, the difference is an additional £42 month, which for those with single income families is a full tank of petrol.

“If they can afford to, I believe every business owner should follow suit. Companies will take a double hit because of the increase in employers’
National Insurance contributions as well.”

As well as encouraging other businesses who can afford to to increase pay, he’s urging them to follow suit in improving hours too.

Not only increasing pay, 71a will also trial a four day working week.

The company, which is based on Gloucester, is known for having built and scaled websites that receive over 3.5 million visitors per month.

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The idea of the four-day working week is that company employees will work for just 80 percent of their normal week at 100 percent of their pay.

It’s called the 100:80:100 model.

Other organisations that have endorsed the pilot scheme include the think tank Autonomy, as well as researchers from Cambridge University, Oxford University and Boston College.

Another business that is involved in the four-day working week pilot scheme is Edinburgh-based Canon Medical Research Europe, which employs 140 people.

Ken Sutherland, the president of Canon Medical Edinburgh said: “We recognise that working patterns and the focus that we all give to our work-life balance has changed substantially during the pandemic.”

The cost of living crisis is rapidly affecting inflation, which increased by 5.4 percent in the year to December in the UK.

Inflation is forecast to hit a 30-year high of more than six percent this spring.

National Insurance contributions (NICs) are a tax on earnings and self-employed profits.

It is paid by employees, employers and the self-employed. National Insurance contributions can help to build a person’s entitlement to state pension and other benefits.

With the new NI increase, an employee earning £20,000 a year will pay an extra £89 and someone on £50,000 will pay an additional £464.

Many have argued that the rise will have a greater impact on lower-income earners while business leaders warn that firms could offset the rise by hiking up prices.

Campaigners have also urged the Government to scrap the NI increase at a time when households are already struggling with rising energy bills and
living costs.

The Government has said that the changes are expected to raise £12billion a year to help support the NHS.

A proportion of the funds will be put towards the UK’s social care system.