New analysis from the TaxPayers’ Alliance (TPA) has laid bare the unfair impact of the new health and social care levy, with workers seeing a total national insurance bill of more than seven times that of the retired, at £4,662. This includes the contribution from both workers and their employers, including the new levy.
Research based on ONS data shows that the bill for the retired, who face on average £596 per year in employee and employer national insurance contributions, will be dwarfed by the £4,662 contribution of the non-retired. This could see around 1,077,435 older people in work contribute more to the levy than those of the same age who have retired.
The distributional analysis also estimates that the levy will result in poorer workers paying a higher proportion of their income in national insurance. For poorer non-retired households, national insurance would rise from 7.22 per cent to 7.93 per cent of their gross income, compared to richer ones who would see a rise from 4.72 per cent to 5.21 per cent. This is because national insurance is a regressive tax, which hits the poorest hardest.
The campaign group have opposed the new hike, calling for a fairer and more sustainable solution for fixing social care than forever ramping up national insurance rates.