National Insurance tax cut to save average earners hundreds

27 million workers will have more cash in their pocket this year thanks to a yearly tax cut that came into effect on 6th January.

The main rate of National Insurance has been cut from 12% to 10%, reducing National Insurance by more than 15%. For the average salaried worker earning £35,400 per annum, this equates to a saving of £450 a year and £1,000 for a household with two average earners.

This is the largest cut to the current personal tax system since July 2022 when the National Insurance personal allowance increased from £9,880 to £12,570, allowing workers to hold onto an extra £2,690 tax free and taking 2.2 million workers out of paying tax altogether.

To mark the tax cut, HMRC have also launched an online tool to help people understand how much they can save in National Insurance this year.