A reduction in National Insurance boosts UK households

An historic National Insurance cut has been instituted by the Government to ease financial burdens on UK households, resulting in savings of hundreds of pounds per household per year.

The main rate of National Insurance has been reduced by 2p, dropping from 12% to 10% as of Saturday, 6 January 2024. The average salaried worker earning £35,400 will save £450 as a result of this substantial reduction, exceeding 15%.

A household with two average earners could save nearly £1,000 annually, which would boost families' disposable income.

Tax cuts are part of a broader strategy to stimulate economic recovery following the pandemic.

HMRC has launched an online tool to help people understand tax cuts. Employers can use this tool on the Government's cost of living support website on GOV.UK to estimate potential National Insurance savings based on their salary information.

The tax cut will be supplemented by further measures later this year, including a reduction in National Insurance for 2 million self-employed individuals on 6th April 2024. A self-employed person earning £28,200 will receive £350 from this move, part of the Government's commitment to supporting businesses and households.

Jeremy Hunt, Chancellor of the Exchequer, stated:

"With inflation halved, we've turned a corner and are cutting taxes - starting with today's record cut to National Insurance worth nearly £1,000 for a household.

"From nurses and brickies, to cleaners and butchers, 27 million hard-working Brits will have a little more cash in their pockets."