Background:
-
HM Government is planning to raise national insurance contributions (NICs) from April 2022 by 1.25 percentage points for employee, employer and self-employed national insurance. The purpose is two-fold: to meet demand for NHS backlogs (created because of covid-19) and for the provision of social care.
-
In 2021-22, NICs are forecast to raise £147 billion, an increase of £2 billion from 2020-21. They are set to rise another £6 billion to £153 billion in 2022-23 (before the NICs increase was announced).
-
The poorest 10 per cent of households already pay 57 per cent of their gross income in taxes compared to 39 per cent for the richest 10 per cent and 36 per cent for all households.
- With the proposed rise in NICs, non-retired individuals will have a national insurance bill more than 7 times greater than retired individuals (£596 against £4,662).