National Insurance update: Increase to go ahead in April – ‘one of many costs!’ | Personal Finance | Finance
Prime Minister Boris Johnson is pressing ahead with the tax hike he says is necessary to pay for social care and the NHS. The rise will mean workers, the self-employed and employers will see their National Insurance contributions rise by 1.25 percent from April. How will the increase affect your pocket?
The National Insurance increase is a contentious subject which is receiving a lot of backlash from backbenchers, not least of all because it backtracks on a Conservative promise to voters not to raise taxes at the last election.
Conservative MP Jacob Rees-Mogg asked the PM to shelve the idea last week but despite this, it still looks set to go ahead despite millions of households already struggling to meet the cost of living.
The increase will help pay for the Health and Social Care Levy and is only proposed for one year, after which National Insurance will return to previous levels.
The tax will also need to be paid by people over state pension age.
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Britons are being asked to find more money for taxes while at the same time the cost of living is squeezing their pockets.
The Institute for Fiscal Studies (IFS) said the problem is that while everyone is seeing the cost of everything increase, it’s not matched by benefit rises or pay increases.
Robert Joyce, deputy director at the Institute said people on benefits are struggling.
He said: “Doing so would compensate benefit recipients on average for higher costs, including energy costs.”
It’s worth getting in touch with the local council if anyone is struggling and hasn’t received a letter.
How much people can get depends on their local authority.
However, in some parts of the country people have reported being offered £100.
Chancellor Rishi Sunak established the Household Support Fund in his last Budget as a way to help households during the pandemic.
