Chancellor Jeremy Hunt’s National Insurance (NI) cuts, which come into effect this weekend, offer an immediate and welcome boost to take-home pay for an estimated 27 million employees across the country.
However, as the dust settles on this Autumn Statement decision, Aegon’s Pension Director Steven Cameron has flagged potential implications for individual finances and the future funding of the State Pension and current Triple Lock policy.
Class 1 NI deductions will be cut from 12 per cent to 10 per cent on Saturday, January 6. The change will mean an average worker on a salary of £35,400 will get a tax cut of more than £450 in 2024/25, while an employee earning £50,000 will pay £3,743 in National Insurance after the change, saving about £749.
Steven Cameron said: “The NI cut offers a welcome New Year boost for millions of employees, offering some relief to the cost of living challenge.” The pensions expert continued: “While positioned as a ‘tax’ cut, National Insurance operates differently from income tax.
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