Notice a little boost to your pay packet this month? Around 27 million people in the UK paid less in National Insurance after a second round of cuts to the rate came into effect from 6th April 2024.

The Chancellor announced the cuts in the Spring Budget, which saw the NI rate lowered by two percentage points from 10% to 8%. This follows changes from the Autumn Statement which came into effect in January 2024 and took National Insurance from 12% to 10% for employed workers.

While it’s nice to see a little extra in your payslip, it’s worth noting that this isn’t a true tax cut. Income tax thresholds were frozen in 2022, which means that as wages increase with inflation, more people will end up paying more tax (this is called fiscal drag).

According to the Office for Budget Responsibility, this six-year freeze in the Personal Allowance could lead to nearly 4 million extra people paying income tax between 2022-23 and 2028-29.


How much will I save in the National Insurance cuts?

The change could see someone on the UK average salary of £35k earn an extra £37 per month or £449 per year. Anyone earning more than £50,270 a year will save the maximum of £754.


Table showing the effect of 2024 national insurance cuts on a salary of £25k, £35k, £45k and £55k.


*Calculated based on gross income, assuming standard auto-enrolment pension contributions and not including student loan repayments.

Use a National Insurance Calculator to see how much you’ll pay in 2024.


Are there changes to National Insurance for self-employed people?

Yes, from 6th April 2024, Class 4 National Insurance Contributions for self-employed people will decrease from 9% to 6%. Plus, the self-employed will no longer have to pay Class 2 NICs – saving the average self-employed person on £28,200 a year £350 in 2024/25.1


What should I do with my extra cash?

Although it could be tempting to spend the extra cash upfront, our experts explain how you could turn it into something greater by setting it aside.


Get closer to your first home

For those saving for a deposit with a Lifetime ISA, the extra cash gained from the NI cuts could give you up to £900 extra per year!

Someone earning £25,000 could gain £249 a year under the new rate. Together with the 25% government bonus, that would stack up to £311 if deposited into a LISA.

For earners over £50,270 per year, that would increase to around £942 towards your first home, including the government bonus.

A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.


Explore the Moneybox Lifetime ISA


Turn your money into something greater

Someone on the average salary in the UK can expect to gain around £37 extra every month with the new NI rate.

If you were to use that extra cash to invest £10 per week into a Moneybox Stocks & Shares ISA, it could grow into £5,950 (including gains of £732) in 10 years time!*

But remember, these projections are not a guarantee of future performance and you could get back less than you invest. Plus, all investing should be long term (minimum 5 years).

*Projections are based on growth forecasts compiled by independent experts, and are inclusive of fees. 


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Stocks & Shares ISA


Build a retirement worth waiting for ️

A 2% increase to your pension contributions may sound small but compounded over time could make a huge difference to your retirement savings.

Let’s look at ‘Alice’ as an example:

  • She’s age 35 and plans to retire at 67
  • Her annual salary is £35,000
  • She already has £20,000 in pension savings
  • She currently contributes 8% of her salary into her workplace pension

Alice’s projected pot would be £334,000. By adding the extra 2% gained from NI cuts to bump her pension contributions up to 10%, her projected pot would grow to £398,000 – a difference of £68,000! By retirement, that extra £449 per year, grows to almost £70,000.

Figures are indicative – not guaranteed. It assumes a 5% return on investment each year over 32 years. It also uses general assumptions to calculate the projection (like the pension fees charged and the future rate of inflation). As with all investing, the value of your pension can go up and down, and you may get back less than you invest


Explore the Moneybox Pension


Grow your savings  ️

Set aside your extra income with a savings account and earn a great rate!

Unlock a reward rate of 5% with a Moneybox Simple Saver by opening a qualifying Moneybox account.* Someone on the average UK salary of £35k could earn an additional £22.45 per year on top of their extra savings with a Simple Saver.

With a Moneybox Cash ISA, you can earn 5.16% on balances of £500 or more (rate as at 05/02/24). If someone earning £55k or more put their yearly additional earnings from NI cuts of £754 into a Cash ISA, they could get an extra £37.70 on top!


*You will earn this reward rate if you either: have a balance above £0 in a qualifying Moneybox account, which includes: Cash ISA, Stocks & Shares ISA, Lifetime ISA**, Junior ISA, Personal Pension, or; have a Reward Savings Account that hasn’t been cancelled.

**If your balance in your Lifetime ISA drops to £0 then you are eligible to keep the reward rate for 12 months or until 13/02/2025, whichever date is later.



Important to know

The Simple Saver lets you withdraw once per calendar month.

5.16% AER (variable) includes a bonus rate of 0.91% for the first 12 months. A lower rate of 0.75% AER (variable) applies if certain account conditions aren’t met. 

Interest is accrued daily and paid into your account yearly on the date you opened your Cash ISA. The rate is variable and we’ll inform you if it changes.