The 2025/2026 tax year brought significant changes to National Insurance rates. This guide explains what changed, how much you'll save, and what it means for your take-home pay.
What Changed in 2025/2026?
From April 2025, the main rate of Class 1 Employee National Insurance was cut from 8% to 6% on earnings between the Primary Threshold (£12,570) and the Upper Earnings Limit (£50,270). The rate on earnings above £50,270 remains at 2%.
This represents the second NI cut in under two years, following the previous reduction from 10% to 8% in early 2024.
How Much Will You Save?
The savings depend on your income level. Here are examples based on a NI rate reduction of 2% on the main band (£12,571 - £50,270):
- £20,000 salary: Save approximately £149 per year
- £30,000 salary: Save approximately £349 per year
- £40,000 salary: Save approximately £549 per year
- £50,000 salary: Save approximately £754 per year
- £60,000+ salary: Save approximately £754 per year (capped at the UEL)
Who Benefits Most?
The NI cut benefits all employees equally on earnings between £12,570 and £50,270. Unlike income tax changes, the NI reduction gives the same 2% saving across the entire band, meaning mid-earners see proportionally larger benefits.
For example, someone earning £25,000 sees an effective 2.4% increase in take-home pay, while someone earning £100,000 sees a 0.8% increase.
Self-Employed Changes
Class 4 NI for self-employed individuals was also reduced. The main rate dropped from 6% to 4% on profits between £12,571 and £50,270. The additional rate of 2% on profits above £50,270 remains unchanged.
Employer NI Remains Unchanged
Employer National Insurance contributions remain at 13.8% on earnings above £9,100 per year. This means the cost of employing staff hasn't changed for businesses.
Impact on Your State Pension
Despite paying less NI, your entitlement to state benefits including the State Pension remains unaffected. The government has confirmed that a qualifying year of NI contributions still counts the same regardless of the rate paid.
Use our salary calculator to see exactly how the NI rate cut affects your take-home pay for any salary.