Everything you need to know about National Insurance increase
Boris Johnson has today confirmed the 1.25% increase in National Insurance to fund social care.
In 2019 Mr Johnson won an election promising not to hike income tax, VAT or National Insurance Contributions (NICs).
However, today sees the Prime Minister break one of his manifesto promises.
Boris Johnson today defended his betrayal, saying many governments had ducked social care reform and adding: "I accept this breaks a manifesto commitment which is not something I do lightly, but a global pandemic was in no one’s manifesto."
How will the increase affect you?
The increase which begins in April 2022 now means that it will cost around £180 a year for a worker on £24,100; £255 for a worker on £30,000; and £715 for a worker on £67,100 in national insurance payments.
Firms will have to contribute too.
From April 2023, the rise will be charged at the same rate but change status to a 'Health and Social Care Levy' that appears on Brits' payslips. From this point it will also apply to workers who are over pension age, which NICs do not.
From October 2023 the money will be partly used to fund a new £86,000 cap on the amount people must pay for care over their lifetimes - and a new-style £20,000 floor, which saves people from paying for their care once assets fall below a certain level.
Currently anyone with £23,250 in assets has to pay for their own social care. From October 2023 this threshold will drop to £20,000.
Anyone with assets between £20,000 and £100,000 will have to contribute to their care, but will also receive means-tested support.
The Prime Minister said: "The plans will help many more people with modest assets".