Many people will have a little more in their pay packet from this month, thanks to an increase in the National Insurance thresholds.
From July 6, NI starting thresholds rose from £9,880 to £12,570, but whether you are better off depends on how much you earn.
It’s also important to remember that in April there was an increase of 1.25% in National Insurance Contributions (NICs) to fund the health and social care levy, so this ‘cut’ follows a recent increase.
Even taking this into account, the Government claims seven in ten workers will be paying less in NICs than they were before the April rise. The Government says nearly 30 million working people will benefit, with a typical employee saving more than £330 in the year.
However, the increase comes against a backdrop of rising inflation and soaring fuel prices, so everything is costing more.
Here’s a quick guide to the change, using figures from Hargreaves Lansdown:
| Wages | £20,000 | £30,000 | £40,000 | £50,000 | £60,000 |
| Pre April 2022 NICs | £104 | £204 | £304 | £404 | £423 |
| April – June 2022 NICs | £112 | £222 | £333 | £443 | £470 |
| From July NICs | £82 | £192 | £303 | £413 | £443 |
This table shows that earning up to £40,000 will see an increase in your pay packet, even if slight. Those earning more will see them paying more than in March 2022.
Careful tax planning can mitigate any increasing tax burden and rise in cost of living. To talk to the tax specialists at Optimum in Swindon and Cheltenham, please get in touch.
