London Daily

Focus on the big picture.
Wednesday, Oct 29, 2025

National Insurance rise to be reversed in November

National Insurance rise to be reversed in November

A 1.25% rise in National Insurance will be reversed from 6 November and the government will axe a planned levy to fund health and social care.

The rise was introduced in April under ex-Chancellor Rishi Sunak, but during the Tory leadership race Liz Truss pledged to change it.

The funding for health and social care will now come from general taxation.

Chancellor Kwasi Kwarteng made the announcement ahead of a "mini-budget" on Friday.

The Treasury said the change would save nearly 28 million people an average of £330 per year.

Most employees will get the tax cut in their November pay packets, with some getting it in December or January "depending on the complexity of their employer's payroll software", the Treasury said.

About 920,000 firms will get a tax reduction of nearly £10,000, it added.

National Insurance is a tax paid by employees, employers and the self-employed.

Employees pay National Insurance on their wages as well as income tax, employers pay extra NI contributions for staff, and the self-employed pay National Insurance on their profits.

"Taxing our way to prosperity has never worked," Mr Kwarteng said.

"To raise living standards for all, we need to be unapologetic about growing our economy. Cutting tax is crucial to this."

The National Insurance rise was put in place to help the NHS recover from the coronavirus pandemic, and the planned social care levy was also designed to support the NHS from April.

The levy was expected to raise around £13bn a year to fund social care and deal with an NHS backlog that built up during Covid.

There are weekly thresholds for National Insurance. There is nothing to pay on the first £242 earned per week, then its 13.25% on earnings between £242.01 and £967 and 3.25% on the rest.

That means, in general,people who earn more than £12,570 a year pay National Insurance, and the more they earn, the more they will benefit from this change.

For example, somebody earning £20,000 will save about £93 a year, and somebody earning £100,000 will save £1,093, compared to now.

From April 2023 Mr Kwarteng will also scrap an increase to dividend tax. This change was brought in alongside the payroll tax increase to raise taxes on people paid in a different way.


Kitty Ussher, chief economist at the Institute of Directors industry body, said raising employers' National Insurance had been "a mistake".

"This was quite simply a tax on jobs, which businesses had to pay regardless of whether they are profitable," she said.

"Many of our members told us that the impact of the increase was that they would have no choice but to push up prices, making inflation even worse.

"Others said the rise in the cost of employing people meant they would think twice about taking new staff on, or potentially make the difficult decision to let colleagues go."

The government announcement came ahead of a "mini-Budget" which is expected to be announced on Friday.

Measures could include:

* Scrapping a planned increase in the tax companies pay on their profits

* Possible cuts to other taxes, including stamp duty which is paid on house purchases

* Ending the cap on bankers' bonuses

* Plans to boost economic growth, such as creating low-tax zones around the UK

Newsletter

Related Articles

0:00
0:00
Close
UK Retail Inflation Slows as Shop Prices Fall for First Time Since Spring
Next Raises Full-Year Profit Guidance After Strong Third-Quarter Performance
Reform UK’s Lee Anderson Admits to 'Gaming' Benefits System While Advocating Crackdown
United States and South Korea Conclude Major Trade Accord Worth $350 Billion
Hurricane Melissa Strikes Cuba After Devastating Jamaica With Record Winds
Vice President Vance to Headline Turning Point USA Campus Event at Ole Miss
U.S. Targets Maritime Narco-Routes While Border Pressure to Mexico Remains Limited
Bill Gates at 70: “I Have a Real Fear of Artificial Intelligence – and Also Regret”
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Amazon Announces 14 000 Corporate Job Cuts as AI Investment Accelerates
UK Shop Prices Fall for First Time Since March, Food Leads the Decline
London Stock Exchange Group ADR (LNSTY) Earns Zacks Rank #1 Upgrade on Rising Earnings Outlook
Soap legend Tony Adams, long-time star of Crossroads, dies at 84
Rachel Reeves Signals Tax Increases Ahead of November Budget Amid £20-50 Billion Fiscal Gap
NatWest Past Gains of 314% Spotlight Opportunity — But Some Key Risks Remain
UK Launches ‘Golden Age’ of Nuclear with £38 Billion Sizewell C Approval
UK Announces £1.08 Billion Budget for Offshore Wind Auction to Boost 2030 Capacity
UK Seeks Steel Alliance with EU and US to Counter China’s Over-Capacity
UK Struggles to Balance China as Both Strategic Threat and Valued Trading Partner
Argentina’s Markets Surge as Milei’s Party Secures Major Win
British Journalist Sami Hamdi Detained by U.S. Authorities After Visa Revocation Amid Israel-Gaza Commentary
King Charles Unveils UK’s First LGBT+ Armed Forces Memorial at National Memorial Arboretum
At ninety-two and re-elected: Paul Biya secures eighth term in Cameroon amid unrest
Racist Incidents Against UK Nurses Surge by 55%
UK Chancellor Rachel Reeves Cites Shared Concerns With Trump Administration as Foundation for Early US-UK Trade Deal
Essentra plc: A Closer Look at a UK ‘Penny Stock’ Opportunity Amid Market Weakness
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
China and Russia Deploy Seductive Espionage Networks to Infiltrate U.S. Tech Sector
Apple’s ‘iPhone Air’ Collapses After One Month — Another Major Misstep for the Tech Giant
Graham Potter Begins New Chapter as Sweden Head Coach on Short-Term Deal
Ecuadorian President Daniel Noboa Alleges Poison Plot via Chocolate and Jam
×