Martin Lewis issues National Insurance warning over £615 increase

Martin Lewis has issued a National Insurance warning to workers after a £615 Budget increase. The BBC and ITV star spoke out in a warning in the wake of Chancellor Rachel Reeves delivering her Budget and Autumn Statement today.

The Money Saving Expert founder said: "The big change, the big announcement making a lot of money for the revenue is there’s going to be an increase on the National Insurance cost to employers. National insurance [that] employees pay went down two percent in the last couple of years. Instead of putting that up, it’s basically been shifted onto employers.

"So the rate of National Insurance that employers pay is going up from 13.8 to 15% and crucially they will start paying that on an employee earnings of just £5,000 a year rather than £9,100 a year as they do right now. So that’s a big hit to many employers."

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He warned "smaller employers will see an increase in the allowance they get so now won’t have to pay National Insurance on their first £10,500 a year". He said: "Currently, an employer starts paying National Insurance at £9,100. If you drop that to £5,000 at a 15% rate just on that difference alone, that’s £615 more a year, per employee."

He also warned "something is going to have to pay for that". He said "it will either come out of the company profits, increased cost to consumers or reduced salary and benefits in future for employees. So whilst it’s not a direct cost to consumers, it probably will have some knock-on affect on consumers and workers in the future."

Following today's 2024 Autumn Budget, Simon Heath, Managing Partner at Heligan Group, has provided a reactionary response.
According to Simon, increases to the national minimum wage might help the UK’s lowest earners upfront.

However, this was coupled with announcements that will ultimately create inflationary pressures that will wipe out any real-term improvements to their financial security. Labour’s first budget since 2009 looks like Robin Hood on the tin but Christmas Grinch under the skin.