Thanks to changes to the National Insurance threshold that have just come into effect, everyone earning money through PAYE (in essence, workers who are employed rather than self-employed) will see a boost to their income of around £30 a month.
Announced by Chancellor Rishi Sunak in his Spring Statement, the changes now mean that the threshold at which workers start paying National Insurance (opens in new tab) has increased from £9,880 to £12,570. Essentially, you can now earn more before you have to pay National Insurance.
The threshold change will mean that some people no longer have to pay National Insurance and others will be paying less compared to the previous tax year.
The threshold change will remain in place, even though April's National Insurance increase will be reversed (opens in new tab).
What does the change in National Insurance threshold mean for me?
According to The Treasury, almost 30 million workers will benefit from this change. Here’s a rough guide as to how the change affects you, based on your salary.
If you’re one of the 2.2 million people who earn less than £12,570, this change means you will be taken out of paying National Insurance altogether. You won’t pay income tax either, as the income tax threshold is also £12,570.
If your salary is £20,000 a year, you would have been taking home around £1,431 per month (after National Insurance and income tax had been deducted). But now the increased threshold is in effect, you can expect your take home pay to be closer to £1,461, which is an extra £30 in your pay packet each month. (Bear in mind that this figure is indicative. It doesn’t take into account any pension or other deductions so your actual figure may be different).
For those earning £35,000 a year, your take home pay is likely to increase from £2,265 to £2,295, which is again, an increase of about £30 each month.
Those on salaries of £55,000 will also see a £30 monthly increase in their take home pay - from £3,339 to £3,368 (again, excluding pensions and other deductions).
If you are self-employed, you will also benefit from the threshold change, but due to how you pay National Insurance, you won’t see the benefit until the start of the new tax year in April 2023.
-
-
Dear Edward true story: Who was Ruben Van Assouw, who inspired the Apple+ TV series with Taylor Schilling?
Dear Edward true story: Apple+ TV brings the imagined aftermath of a real life plane crash to life, with Taylor Schilling at the helm.
-
Molly-Mae Hague shares touching milestone with baby Bambi and Love Island fans are in tears
Molly-Mae Hague has shared a video of the heartwarming moment she brought her newborn daughter home with fans
-
I saved £121 on my monthly food shop with this ONE change
You might have even considered this change yourself, but not realised just how much you could slash off your bill
-
Will Netflix stop password sharing? BIG rule change coming in spring 2023
New rules are coming into force that will affect whether you can share Netflix accounts. Here's what you need to know
-
10 tips from a money expert to reduce your childcare costs
Top tips from a finance expert on how to reduce your childcare costs amid the cost of living crisis
-
8 sneaky ways supermarkets get you to spend more - and how you can beat them
Discover the sneaky tactics supermarkets use to encourage you to spend more money, and what you can do to fight back
-
Why have I paid council tax in February?
Here's why you might have paid council tax in February instead of having a break
-
6 things you should NEVER do to save money (and 3 things you should!)
There are loads of ways to save money, but these six options could actually be more harmful than helpful
-
The major money reason you need to be on the electoral roll
Being on the electoral roll doesn’t just give you voting rights – it can improve your financial situation too
-
Make your Tesco Clubcard vouchers last longer with THIS simple trick
As Tesco issues a warning that £16 million of Clubcard vouchers are due to expire at the end of February, here’s how to extend the life of yours
