Millions Of People Will See More Money Going Into Their Bank On Pay Day This Week
Published
| Last updated
Millions of Brits will see more money going into their bank accounts on pay day this week.
About 30 million workers will be able to keep more of their earnings thanks to the changes made to National Insurance (NI).
The move is expected to lower taxes by around £6 billion, meaning many workers will be seeing more money in the bank than before.
The government is hoping this move will help people struggling to deal with the cost of living crisis as skyrocketing inflation and stagnant wages continue to put a financial squeeze onto many households.
According to the government, this change will save people earning more than £12,750 up to £330 a year, but the actual figure will depend on how much you make.
Today you can earn up to £9,880 before you need to begin paying NI, but as of midnight tonight that amount jumps up to £12,750.
Around 2.2 million people are going to be freed from having to pay NI entirely, while millions of others will be able to pay less, meaning more money in their pockets.
That won't be the case for everyone, though, as people on higher salaries will end up paying more overall, but they'll be feeling the squeeze less than the people who will benefit most from this.
Martin Lewis and his team at Money Saving Expert have made a payday calculator which you can use to see how much your monthly earnings will change.
Put simply, lower earners can expect to pay less NI and keep more of their earnings from midnight tonight while higher earners are in line to pay more.
Boris Johnson boasted previously that he was delivering on 'the single biggest tax cut in a decade', which is nice of him considering he's put the tax burden on UK taxpayers to the highest point in 70 years.
One of those taxes raised was National Insurance, as back in April the government put up the amount of NI you pay from 12p in the pound to 13.25p.
The government has claimed it will be saving people up to £330 over a year, though some have claimed that most Brits won't see anywhere near close to that amount.
Their analysis points towards anyone with a salary of £41,389 or above paying more overall in NI contributions.
They also report that the Treasury's own calculator for people to work out how much they'll save isn't accurate, as their own analysis of the figures shows people will keep less than the Treasury's calculator claims they'd save.
The move might also hit people's pensions, as normally you need to have spent 10 years paying National Insurance to qualify for the state pension and 35 years to get the maximum amount.
With around 2.2 million people being taken out of paying NI altogether, some might be in trouble further down the line.
