Pensioners to pay levy as National Insurance rises! How much will you have to pay?
Boris Johnson warned of National Insurance 'gamble' by MP
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
People who are over retirement age had not previously had to pay National Insurance, but they will now be roped into footing the bill of covering people’s care costs. The NI hike could cost British workers hundreds of pounds every year.
Under the current system, workers pay 12 percent on earnings between £9,568 and £50,270, and two percent on anything above £50,270.
Here is how the National Insurance hike will impact the normal British worker:
People earning £10,000 a year currently pay £52, they will pay £5 more each year (£57) as a result of the rise.
Those on a £20,000 salary now paying £1,251 a year will pay £130 extra, up to £1381.
People earning £30,000 a year now paying £2,452 will pay £255 in additional NI, a total of £2707.
For those on a salary of £40,000, who currently pay £3,652, the increase will mean they need to pay an extra £380 each year, or £4032 in total.
People who earn £50,000 a year currently pay £4,852, but the National Insurance hike means an increase to £5357, an extra £505 per year.
People pay mandatory national insurance if they are over 16 and are an employee earning more than £184 a week, or are self-employed and making a profit of £6,515 or more a year.
Free bus pass and free prescriptions could be affected due to state pension age changes [INSIGHT]
Government to scrap free NHS prescriptions for over 60s – Three things you MUST do now [WARNING]
Winter Fuel Payment dates for 2021 as bills soar in fuel crisis [ALERT]
National Insurance tax helps pay for services such as the NHS, maternity, sick and bereavement pay, and the state pension. It is paid by people who are earning, and people have traditionally ceased paying it when they reach the state retirement age.
However, it has been confirmed that people who are working past the state retirement age, currently 66 in the UK for both men and women, will also have to chip in and pay the 1.25 percent hike in National Insurance.
By increasing the rate of NI, the Prime Minister has broken a pledge from his 2019 election campaign, when he stated that it would not be increased. Mr Johnson accepted that he had broken his promise, but said that it was a necessity due to the continuing financial impact of the COVID-19 pandemic.
He said that breaking a manifesto pledge is “not something I do lightly, but a global pandemic wasn’t in anyone’s manifesto.”
He added that “this is the right the reasonable and the fair approach” and that he believes “the people of this country understand that in their bones and they can see the enormous steps that this government and the Treasury have taken.”
Mr Johnson also confirmed to Parliament that the new rates will come into effect from April 2022.
From 2023 the extra amount will be shown separately on people’s payslips as a “Health and Social Care Levy”, but until that time it will appear as a National Insurance rise.
The goal of the NI hike is to help clear the NHS backlog which has built up to due to the COVID crisis. This has led to waiting lists being at all-time highs, into the millions.
As part of the reforms to health and social care, from October 2023, care costs will be fully covered by the Government for anyone who has assets of less than £20,000. People with assets of less than £100,000 will also receive some level of state support towards their care, on top of making a personal contribution to the costs.
Unlike the NHS, the social care system is not free for everyone, and includes the provision of care homes.
The increase is expected to raise over 36 million pounds across the next three years, and this money will go directly towards the reforms.
The thought behind using a National Insurance increase to fund the new plans is to spread the burden between individuals and business, meaning everyone will have to contribute proportionately according to their means, even those above state pension age.
The announcement has been criticised by the Labour party, who have accused the Government of choosing an unfair way of paying for social care.
Source: Read Full Article