National Insurance Costs Set to Rise

From the 6th April, around 6 million workers will see a rise in their National Insurance costs.

Changes to state pension rules will see many workers’ National Insurance contributions increase by 1.4% which could equate to as much as £37 per month. This is a policy which was announced in the Budget in March 2013, however is just now taking effect.

Links to State Pension

These increases are linked to the new flat-rate state pension, also being introduced on the 6th April. We took a look at the new state pension rules in a previous blog post. In summary:

“Previously pensioners could contribute towards both a basic flat rate state pension and an additional state pension, which was partly earnings-related. To obtain the full rate under the new scheme, pensioners must have made a minimum of 35 years’ worth of national insurance contributions; pensioners with fewer than 10 years’ worth of contributions will receive nothing. The new scheme applies to those who reach state pension age on or after April 6; men born on or after 6 April 1951 and women born on or after 6 April 1953”.

The Guardian has more on the changes to state pensions and National Insurance contributions here.