Martin Lewis issues National Insurance warning which could cost workers £369

Martin Lewis has issued a National Insurance warning over workers losing £369 each. The BBC Sounds and ITV star spoke out on his Money Show, which ared on Thursday in the wake of the Labour Party Budget from Chancellor Rachel Reeves.

Discussing National Insurance changes, Mr Lewis said the new contribution rates will cost workers, adding: “So £9,100 minus £4,000 is £5,100 so you’re paying out an extra £4,100. At the new rate of 15%, 15% of £4,100 is for every employee who it’s paid for, earning above £9,100, a firm will have to pay an extra £615 a year. It is a very big rise.”

Hhe added: “But let us be honest about this change. It is likely to have an indirect impact on some employees’ pockets. Firms have to make a choice - are they gonna reduce their profits? Are they gonna charge their customers more? Or are they going to reduce future employee benefits and salaries?

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“And the Office for Budget Responsibility, the official body on this, said, well they’ll only be able to pass on about 60 per cent of the cost to employees in the short term. So it’s saying around 60 per cent of this will actually be a cost met by employees.

"Which is why it’s fair to say this is an indirect tax rise on the employees.” From April the threshold at which an employer pays National Insurance for staff has been cut from £9,100 to £5,100, and the rate has been increased by 1.2 percentage points from 13.8 to 15 per cent.

It means average of £615 more that firms will have to pay to employ someone, and Mr Lewis - who is the founder of Money Saving Expert - reckons that ‘60 per cent’ of that will be paid by workers.