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National Insurance rise to be reversed in November

BBC News logo BBC News 22/9/2022
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A 1.25% rise in National Insurance will be reversed from 6 November and the government will axe a planned tax rise to fund health and social care.

The NI rise was introduced in April under former Chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it.

New Chancellor Kwasi Kwarteng made the announcement ahead of a "mini-budget" on Friday.

He said: "Taxing our way to prosperity has never worked.

"To raise living standards for all, we need to be unapologetic about growing our economy. Cutting tax is crucial to this."

The NI rise was put in place to help the NHS recover from the coronavirus pandemic, and the planned social care levy was also to support the NHS.

Instead, that funding will come from general taxation, the Treasury said.

Who will benefit?

NI is paid by employees, employers and the self-employed.

People who earn more than £12,570 a year pay NI, and the more they earn, the more they will benefit from this change.

For example, somebody earning £20,000 will save about £93 a year, and somebody earning £100,000 will save £1,093, compared to now.

© BBC

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