National Insurance contributions are set to increase by 1.25% in April this year, as part of the government’s plans to fund the health and social care sector in the UK.

The rise comes after the impact of the Covid-19 pandemic on the health and social care sector which has resulted in a substantial backlog. Therefore, to tackle this, the government has introduced the increase to be able to fund a catch-up programme to get the NHS back on track.

When will the increase in contributions occur?
From 6th April 2022 to 6th April 2023, national insurance will rise by 1.25%. However, from April 2023, the national insurance rate is due to drop back to its current rate with a 1.25% health and social care levy then applied to raise funds for improvements to care services.

Who will this affect and how?

• Employees
• Self-employed
• Employers
• The increase will apply to individuals who are over the state pension age with employment income or profits from self-employment above £9,568.

National insurance contributions will rise by 1.25% and depending on your current employment status and how much you earn:

Employed
If you are employed, you will pay the Class 1 National Insurance contribution of 12%, which is if you earn more than £184 to £967 a week (£797 to £4,189 a month). This is automatically deducted by your employer.

Self Employed
If you are self-employed earning profits of £6,515 or more a year, you will pay the Class 2 or Class 4 National Insurance contribution. If you’re earning less than this, you can choose to pay voluntary contributions to fill or avoid gaps in your National Insurance record.

Employers
If you are an employer, you will pay the Class 1, 1A and 1B National Insurance contribution of 13.8%.

You can apply to HMRC to check your national insurance record and claim a refund if you think you have been overpaid.