Big change to National Insurance means millions will earn more in July – will you?

Boris Johnson briefs cabinet on National Insurance cuts

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The HM Treasury estimates around 30 million people will see their take-home pay increase from July. This will be welcomed by many workers who are struggling to meet the rising cost of living.

News that millions of people will be better off this month because of changes to the National Insurance threshold will no doubt be welcomed.

Changes to the National Insurance threshold will mean that workers can earn £12,570 instead of £9,880 before they pay National Insurance contributions (NICs).

The changes which come into effect from July will also mean two million people will be exempt from paying National Insurance together.

However, not everyone will end up paying less tax.

National Insurance: Who will save under new threshold rules?

  • An employee with a £20,000 annual salary will save £178 on their National Insurance between April 2022 and April 2023.
  • An employee who earns £30,000 per year will pay £53 less than they did the last year.
  • Somebody on a £50,000 yearly wage will pay an extra £197.
  • Britons who receive £100,000 annual pay will see their National Insurance increase by £822.

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HM Treasury has an online tool where people can work out exactly how much more or less NI they will have to pay which can be found at

Britons should enter their annual salary and the calculator will then show three figures.

The first figure is what they should have received before July 6, the second figure is the amount after and the third figure is the potential savings they can make.

The changes will improve the finances of around 70 percent of people who will end up paying less NI than last year.

The biggest saving will be for people who are classed as lower- to middle-income earners when compared to the NI rates paid in the 2021-22 tax year.

According to the Government, the average worker will save around £330 per year.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown said: “Any tax cut is welcome right now, especially one that eases the pain for lower earners.

“They’ve faced the brunt of the rising cost of essentials because it makes up a bigger proportion of their spending, so they need all the help they can get.”

She continued: “However, we’re not talking about vast sums of cash. £330 spread over 12 months is £27.50 a month.

“It’s a drop in the ocean compared to rising costs.

“So while it will help ease the pain slightly, those on lower incomes will still have a huge headache in making ends meet.”

People can check their take home pay at

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