28/11/2023
National Insurance rates cuts
Main NI rate cut from 12% to 10%
Firstly, the main Employee National Insurance rate will be cut from 12% to 10%. This will take effect from the 6th of January 2024. While usually these types of changes would come into effect in April, this earlier date was set so people benefit from the new rate from the beginning of 2024. This will affect 27 million people, and will mean that for someone earning an annual income of £35,400, they’ll be over £450 better off in the coming year.
Class 4 NIC reduces from 9% to 8%
The rate of Class 4 NICs for earnings from £12,570 up to £50,270 will be slashed from 9% to 8% from April 2024.
Class 2 NICs scrapped
The weekly flat rate compulsory charge for Class 2 NICs (£3.45) paid by those who are self-employed and earning over £12,570 will be scrapped from April 2024.
These two cuts of Class 4 and Class 2 will affect 2 million self-employed people, and will mean that someone earning an annual income of £28,200, will save about £350 in the coming year.
Wage increases
National Living Wage
The National Living Wage will increase by 9.8% to £11.44 per hour. This will affect over 2.7 million people, and will mean an increase of £1,800 to the average annual earnings of full-time workers.
National Minimum Wage
The National Minimum Wage will be increased for 16-17 year olds, 18-20 year olds, and apprentices.
For 16-17 year olds, it will increase by 21.2%. The new hourly rate will be £6.40 an hour.
For 18-20 year olds, it will increase by 14.8%. The new hourly rate will be £8.60 an hour.
For apprentices, it will increase by 21.2%. The new hourly rate will be £6.40 an hour.
