Martin Lewis reveals real cost of National Insurance tax hike - it's bad news

Martin Lewis reveals real cost of National Insurance tax hike – it’s bad news. (PA)

The National Insurance price hike announced by Boris Johnson last year is set to hit pockets harder than expected when it is introduced in April, Martin Lewis has warned.

The Prime Minister announced a 1.25% increase in National Insurance last September to address the funding crisis in the health and social care system.

The tax hike will raise around £10 billion, which will be spent on the NHS as it recovers from the Covid-19 pandemic as well as to help people avoid crippling adult social care costs.

The Prime Minister’s official spokesman said: “The Cabinet agreed to the proposals set out.

“There was strong agreement that this is a long-standing issue, particularly on the social care side, which had been ducked for too long and which needed to be addressed.”

Martin Lewis reveals real cost of National Insurance tax hike.

But Money Saving Expert founder and cash-saving guru Martin Lewis has warned many of us, including the government what we are missing a very important detail.

The consumer champion shared a tweet explaining how the tax hike is actually 10%.

One social media user shared a graphic from BBC News and said: “Please BBC news and everyone else! National Insurance is going up by 1.25p in the pound. That’s a 10.4% increase in NI, not 1.25%.”

Mr Lewis agreed: “John is correct. That graphic is wrong it is missing the word 'points'. National Insurance will rise by 1.25% points in April, which is a rise of 10%.”

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He then turned his attention to the government, asking them to amend “misleading information” on its website.

Sharing a screen grab from the government website, he tweeted: “Dear @hmtreasury please could you change the http://gov.uk website which is giving MISLEADING information about the NI rise. It says it is a 1.25% rise. That is not correct for most it is a rise of just over 10%. The rate is rising by 1.25% points. See below”

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But it seems even Mr Lewis’ team of writers were seemingly confused by the information.

He added: “Just to note I've scanned back and seen a few of my team have written 1.25% without the points in a couple of MSE guides. I'm asking them to be corrected now, hopefully treasury will follow suit.”

Martin Lewis has over 1.2 million followers on social media and is the go-to person for money saving advice in the UK.