Apr 5, 2024
National insurance cut to kick in but more pay tax
Workers will see their National Insurance payments cut from Saturday but frozen thresholds mean many are paying more in income tax. For the self-employed, NI contributions on all earnings between £12,570 and £50,270 are being cut from a rate of 9% to 6%.Pensioners will not benefit from the reduction, because those over state pension age do not pay NI. However, from Monday, the state pension will go up by 8.5%.Some pensioners, and families like the Langton-Clarkes, are not simply receiving a tax boost. The result is more people paying tax and more people paying higher rates of tax than would otherwise have been the case. The average earner on about £35,000 has benefitted more from the cut in NI than the hit from frozen tax thresholds. Fiscal drag - as well as rising minimum pay rates - mean somebody working 35 hours a week on the minimum wage is now having to pay tax on almost £8,300 of their earnings.
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