The Social Security (Contributions) (Amendment) Regulations 2025
Introduction The Social Security (Contributions) (Amendment) Regulations 2025 were introduced on 11 February 2025, amending the existing Social Security (Contributions) Regulations 2001. The key changes include:
1. Increase in National Insurance Contribution Rates – From 6 April 2025, the National Insurance (NI) contribution rates for employees, employers, and the self-employed will increase by 1%.
| Contribution Class | Old Rate | New Rate | |—|—|—| | Class 1 (Employees) | 12% | 13% | | Class 1 (Employers) | 13.8% | 14.8% | | Class 2 (Self-Employed) | £3.05 per week | £3.15 per week | | Class 3 (Voluntary Contributions) | £15.30 per week | £15.60 per week |
2. Extension of NI Holiday for Apprentices – The NI holiday for apprentices under the age of 25 has been extended to employers with an annual PAYE payroll up to £500,000 (previously £49,000). – This means that employers with a payroll below £500,000 will not pay NI contributions for apprentices under 25 in any employment during the tax year.
3. Removal of Upper Secondary Threshold – The upper secondary threshold, which previously exempted individuals earning over £967 per week from paying Class 1 NI contributions, has been removed. – This means that all individuals earning above the lower earnings limit (£125 per week) will now pay NI contributions on their entire earnings.
4. Increase in Employment Allowance – The Employment Allowance, which reduces the amount of NI contributions employers pay for their employees, has been increased to £5,000 from 6 April 2025. – This provides additional financial support to small businesses.
5. Changes to Class 3 Contributions – The weekly Class 3 contributions for self-employed individuals have been increased as follows: – Standard rate: From £15.30 to £15.60 – Low profit rate: From £7.75 to £7.90 – The upper profits limit for the low profit rate has been increased from £11,908 to £12,180.
Implementation The Social Security (Contributions) (Amendment) Regulations 2025 will come into effect on 6 April 2025. Employers and the self-employed should update their payroll systems and prepare for the changes outlined above.
Impact The changes introduced by these regulations will have a significant impact on individuals, employers, and the self-employed. The increased NI contribution rates will reduce take-home pay for employees and increase labor costs for employers. However, the extension of the NI holiday for apprentices and the increase in the Employment Allowance may provide some relief for small businesses employing apprentices.
The Social Security (Contributions) (Amendment) Regulations 2025
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