In the 2022/2023 tax year 1.25% will be added to the rate of National Insurance paid by employees and self-employed workers. The government says the extra money is needed to spend on the NHS and social care. It means a typical employee will pay 13.25% instead of 12%.1
However, the Chancellor Rishi Sunak announced in his Spring Statement that the annual threshold for paying National Insurance will go up by nearly £3,000 a year from July 2022.2
It means employees or self-employed workers won't have to pay National Insurance if they earn less than £12,570 a year. This brings it into line with the personal allowance for income tax.
The National Living Wage for people aged over 23 will go up by 6.6% to £9.50 per hour.3 There will also be increases to the National Minimum Wage for those aged under 23.
State Pensions will rise by 3.1% in 2022/2023.4 Those on the full new single-tier State Pension will receive £185.15 a week, up from £179.60. Those on the basic State Pension will go up from £137.60 a week to £141.85.
The amount you can save in a Junior ISA or Child Trust Fund will remain at £9,000 per child in the 2022/2023 tax year. Meanwhile, the allowance for ISAs will stay at £20,000.
Explore more: What is an ISA?
The personal allowance (the tax-free amount you can earn) will remain at £12,570 for the 2022/2023 tax year.5 Alongside this, the basic rate limit (the 20% tax bracket) will stay at £37,700. This means you’re able to earn up to £50,270 before crossing the higher level of tax threshold. Different rates and bands apply to Scottish tax payers.