What Do the Changes in National Insurance Mean For Me?

From 6 November 2022, the National Insurance contributions rates are changing. This is whether you are an employee, self-employed, or an employer. Discover how this applies to you, how much it will cost you and what steps you can take to protect your personal finances.

Connor Campbell Last updated on 07 November 2022.
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What Do the Changes in National Insurance Mean For Me?

On 23 September 2022, the then Chancellor Kwasi Kwarteng announced that the temporary 1.25% National Insurance contributions (NIC) rate increase that came into effect in April 2022 would be reversed from 6 November 2022 for the rest of the financial year.

This came mere months after former Chancellor – and current Prime Minister – Rishi Sunak increased the National Insurance Primary Threshold to £12,570, and reduced Class 2 NIC payments to nil between the Small Profits Threshold and Lower Profits Limit, in July 2022.

Kwarteng also announced that the proposed introduction of a 1.25% Health and Social Care Levy, set to come into effect in April 2023, would similarly be scrapped.

It can be hard to figure out from the headlines exactly how this will affect you personally.

That’s why we’ve put together a guide on what the new National Insurance rates are; how much money you may save out of your wage packet; and what you can do to help manage any changes to your personal finances.

» MORE: How National Insurance works

What are the new National Insurance rates?

The amount you pay in National Insurance is determined by whether you are employed or self-employed, and how much you earn.


From 6 November 2022, the National Insurance rate for employees is 12% on income of £12,570 to £50,270 a year (£1,048 to £4,189 a month). The rate for any income over £50,270 a year (over £4,189 a month) is 2%.

You do not pay National Insurance on your first £12,570.


If you are self-employed, your National Insurance contributions are calculated using your annual profits.

From 6 November 2022, the National Insurance rate is 9% for profits between £9,881 and £50,270, and 2% for any profits over £50,270.

This is on top of the £3.15 a week you pay if your self-employed profits are £6,725 or more.


For employers, the National Insurance contributions rate paid per employee is 13.8% for income above the ‘secondary threshold.’ That’s a salary of £9,100 to £50,270 a year (£758 to £4,189 a month).

Why did the National Insurance contributions rate change?

The NIC rates were cut as part of the Growth Plan 2022 – the ‘mini-budget’ that eventually brought an end to Liz Truss’s brief tenure as Prime Minister.

Kwarteng claimed that the reversal of the rate increase would save 920,000 businesses close to £10,000 on average next year in National Insurance contributions.

» MORE: The mini budget 2022: How will it affect you?

How much less National Insurance will I pay a year?

How much National Insurance you pay is tied to how much you earn. Therefore, so is how much less you may end up paying from 6 November 2022.

The table below compares the estimated Class 1 National Insurance contributions based on the increased rates from 6 July to 5 November 2022, and what Class 1 employees are estimated to be paying annually from 6 November 2022.

Annual income

Estimated annual NIC based on rates from 6 July to 5 November 2022  

Estimated annual NIC from  6 November 2022 onwards

Annual difference





























There are similar changes if you are self-employed.

Managing changes in your personal finances

There are a number of positive steps you can take to try to ensure that any changes to your National Insurance contributions are factored into your budget. . These include:

Work out your after-tax, after-essentials income. This includes all your regular weekly, monthly and yearly outgoings. It will give you hard numbers related to where you may be overspending, and how much you could potentially save.

The 50/30/20 rule. A handy way to budget and divide your take-home pay is:

  • 50% on essentials, such as rent, mortgage, bills and food
  • 30% on wants and non-essential spending
  • 20% on paying off debt and/or into savings

Spending priorities. Although this may not be applicable to everyone, a good rule of thumb when it comes to prioritising your spending is to:

1) Clear your ‘toxic debt’, such as payday loans or high interest credit cards.

2) Start an emergency fund that can cover unexpected expenses.

3) Contribute to your workplace pension scheme.

4) Continue to add to your emergency fund.

5) Pay off your remaining debts.

» MORE: Budgeting 101: how to make your money go further

Image source: Getty Images

About the author:

Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more

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