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Update on NI thresholds and benefit rates for 2020/21

Posted 28th April 2020

National Insurance thresholds for 2020/21

The level at which taxpayers start to pay NICs has risen by more than 10% to £9,500 per year for both employed and self employed individuals (previously £8,632).

All other thresholds for 2020/21 have risen in line with inflation, except for the upper NICs thresholds which will remain at £50,000. The secondary threshold for employer NI contributions has risen with inflation to £8,788 (no longer aligned with the employee Primary Threshold).

Benefit rates for 2020/21

Draft regulations have been published setting out benefit rates for 2020/21 as follows:

  • The New State Pension will rise by £6.60 a week to £175.20
  • The Old Age Pension will increase by £5.05 a week to £134.25
  • Additional Pension, Graduated Pension and other pension increments will rise by 1.7%, in line with Consumer Price Index (CPI) inflation to September 2019
  • Indexation of benefits in line with CPI resumes for all inflation-linked benefits and tax credits this year, resulting in a 1.7% increase

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