As part of budget 2025, Rachel Reeves announced a freeze of National Insurance thresholds and rates until April 2031.
Well not everything was frozen, it was after confirmed that the National Insurance Contributions (NICs) Lower Earnings Limit (LEL), the point where individual start accruing state benefit rights, would rise by +£4 to a new £129 per week.
Whereas in the past actual NI contributions would have started at this LEL, the contribution rate remains at 0% with actual contributions commencing for employees at the Primary Threshold (PT) and employers at a lower Secondary Threshold (ST).
Prior year values where different shown in (italics).
Veterans NICs relief for employers (category V) have also been extended for a further 2 years, so originally due to end on 5th April 2026, this has been extended until 5th April 2028.
The frozen contribution rates are:
And for mariners:
Fiscal drag, fiscal gain or status quo
With the thresholds being frozen more of the working population whose earnings now exceed the single persons allowances will find themselves now subject to National Insurance when before they may have not earned enough. on the other side of the coin, the increasing number of higher rate taxpayers will continue to only attract 2% NIC contributions as opposed to 8% on their increasing proportion of earnings above the NICs Upper Earnings Limit (UEL.
Of course the increasing LEL may see a number who previously qualified for certain state benefits may now loose NIC credits.
PAYadvice.UK 29/11/2026