Thursday, December 1, 2022

How will the reversal of the social security increase affect me?

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The rise was initiated by Boris Johnson’s government, with Rishi Sunak as Chancellorin April and reversed by former Chancellor Kwasi Kwarteng in his infamous mini-budget last month.

Its scrapping is one of the few economic policies introduced by Liz Truss and Mr Kwarteng that has not been scrapped by Jeremy Hunt and has stayed in place with Mr Sunak as Prime Minister.

According to the Treasury Department, most workers will receive a reduction in their Social Security contribution directly through their employer’s payslip in their November salary, although some may be deferred to December or January.

The government said the move to reverse April’s social security hike follows July’s increase in social security thresholds, which are said to have exempted 2.2 million of the UK’s poorest people from paying tax.

As a result of both measures, the government estimates that working people will be on average £500 better off next year.

The government has estimated how the NI cut will affect different groups of income earners. Continue reading here:

For workers below retirement age who earn less than £12,570 a year, the cut in Social Security makes no difference as they pay no Social Security.

Above this income limit, the amount saved increases with increasing income.

Most companies will also see a reduction in their national insurance bills, with each affected company saving an average of £9,600 each year in 2023-24, the Government said.

The levy was developed by Mr. Sunak when he was chancellor the NHS backlog and was expected to raise around £13 billion a year to fund welfare.

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