How will the cut to National Insurance affect my family?

In last year’s Autumn Statement the Chancellor announced a reduction in the amount of National Insurance that employees have to pay. This change came into effect on 6 January 2024.

This small saving is welcomed by families at this time of year when budgets are already stretched, and there will be a little extra going into salaries to help with paying the post Christmas bills.

However, while this is positive, the change to the National Insurance rate will also have a negative impact on parents who are using Childcare Vouchers and are basic rate taxpayers, by reducing the amount of savings available through that scheme. Read more about how the cut in National Insurance affect Childcare Vouchers here.

What is the change and how might it affect me?

From 6 January the main rate of Class 1 National Insurance has been cut from 12% to 10%.

This means that someone on the average salary in Northern Ireland of £32,879 will see an annual gain in their net income of £406.

However, families who are currently making a saving through the Childcare Voucher scheme will have this saving reduced by up to £58 per year, per parent, or £116 per year if two parents in a household are both in the Childcare Voucher scheme.

We are here to answer your questions

The start of a new year is good time to check that you are receiving the best form of support in your current circumstances. Some households may find they are now better off claiming another form of support such as Tax-Free Childcare or Universal Credit. However, you should get expert advice before applying, as there are different eligibility criteria and requirements for each form of support.

Give Employers For Childcare’s Family Benefits Advice Service a call on 028 9267 8200 and one of our trained advisors will be able to give advice and information, and calculate what is the best form of support you may be entitled to in 2024.