Commenting on the Chancellor’s announcement this afternoon (Thursday) that the Government will reverse the recent 1.25 per cent increase in the National Insurance contribution (NICs) rate from 6 November this year, Karl Handscomb, Senior Economist at the Resolution Foundation, said:

“While raising National Insurance was a flawed way to fund social care provision that would initially largely benefit non-National Insurance payers, cutting NICs is an equally flawed way to tackle Britain’s cost-of-living crisis that is hitting lower-income households the hardest.

“This policy will give away most to those who need the least support. The poorest tenth of households will gain just £11.50 this year, while the top 10 per cent on average gain 60 times that amount. Twice as much of the permanent gains will go to the richest 5 per cent of households as the entire bottom half of the income distribution.”