Salaried workers see National Insurance rate cut take effect

January payslips have seen workers across the UK pay a reduced rate of National Insurance for the first time since the rate cut announced last year took effect.

The government announced it would cut National Insurance by 2p from 12% to 10% at the 2023 Autumn Statement – for the average salaried worker earning £35,400 a year, the change will add £450 to their annual take home pay. The change follows the increase in the personal allowance for National Insurance, bringing it in line with the threshold for income tax, made during the 2022 Budget.

For self-employed workers, a reduction in their rate of National Insurance contributions will take place from the tax year beginning 6 April 2024 and is worth £350 for the average self-employed person on £28,200. Employer National Insurance contributions are unaffected by the change.

To mark the tax cut, earlier this month HMRC launched an online tool to help people understand how much they could save in National Insurance this year. 

Chancellor of the Exchequer Jeremy Hunt said:

“This January pay boost for hard-working Brits is part of our plan to grow the economy and build a brighter future where hard work is always rewarded, relieving pressure on UK workers by putting around £450 back in their pockets.”