Don't have time to read this blog? Our Head of Financial Education, Jason Butler has summarised the key takeaways for you in this short videoNational Insurance & The Cost of Living Squeeze
Worried about your finances? Take a minute to complete our financial wellbeing poll. We use your feedback to create content to help you improve your financial wellbeing.Tell us how you feel
The NHS has a massive backlog of patients to deal with following the COVID emergency, plus more and more older people are needing care and support.
To meet these costs the government has announced National Insurance contributions will increase from April. This increase will depend on your employment status and how much you earn, so let’s look at what you need to know and what you can do.
National Insurance is a tax that is applied on your earnings above a certain level. This tax is increasing by 1.25% on earned income from 6th April.
The good news is that the Chancellor has since announced that the amount of money you can earn before National Insurance is payable, will be increasing from £9,568 per annum (£797 per month) to £12,570 per annum (£1047 per month) with effect from July 2022.
This means that over the course of the 2022/23 tax year you’ll pay less National Insurance if you earn less than £34,261. But your take home pay will be lower in April, May and June until the new tax free allowance increases in July.
Most people will need to cope with the temporary reduction in take home pay in the three months until July or, if you earn more than £34,261, adjust to the ongoing reduction in take home pay beyond that date.
Unfortunately, there is no magic wand, and you might think this is easier said than done - and you’d be right. But by acting now, you’ll get on the front foot and enable you to better weather the storm.
To make sure you don’t burn through savings or take on expensive debt to fund your living costs you could look to reduce spending elsewhere.
Adopting the Smart Spending System could help you get control of what you spend your money on. This means cutting out waste, optimising your essential spending and deferring any new spending if possible. Some other things you could explore include:
We know there's a lot of information out there and it can be confusing, so to help you make sense of the essentials, why not register for the Salary Finance Webinar in later April where you can learn more about how to cope with the rising cost of living
Find out more about the Salary Finance products available to you here
Sign up to our newsletter
Our newsletters bring you the latest articles to help you improve your financial wellbeing.
If you want to consent to receiving our newsletter please enter your email below to subscribe. If at any point you want to withdraw your consent please email email@example.com. For more information about how we use your personal data see our privacy notice.