Pensions - Articles - National Insurance increase reversed

 Steven Cameron, Pensions Director at Aegon, comments: “Chancellor, Kwasi Kwarteng, has announced a reversal of the 1.25 basis point increase in employee and employer National Insurance Contributions introduced last April by his predecessor Rishi Sunak. The money raised by the increase was to provide additional funding to support the NHS recover from the pandemic and over time to pay for the government’s share of its new social care deal. It’s good news the government said it is committed to maintaining the funding for the NHS and care sector, worth around £13 billion a year, despite the levy being scrapped, but questions remain over whether this will be possible alongside speculation around other income tax cuts.

 “While reversing the NI increase will lead to an increase in take-home pay for most, it would not make any difference to those earning under the £12,570*.”

 
 *The government has committed to retaining the current National Insurance thresholds. The lower level increased to £12,570 in July.