National Insurance: What is it, what does it fund and what happens if it’s scrapped?

National World - LocalTV

In his Spring budget, Chancellor Jeremy Hunt confirmed a 2p cut to workers’ National Insurance. This indicates the government’s eventual ambition to scrap the tax entirely. Well, National Insurance acts as a form of social security, and is defined by the Oxford Dictionary as being the system of compulsory payments to provide state assistance to people who are unemployed, poorly or retired.

Transcript

00:00 In his spring budget, Chancellor Jeremy Hunt confirmed a 2p cut to workers' national insurance.

00:08 This indicates the government's eventual ambition to scrap the tax entirely.

00:12 Well, national insurance acts as a form of social security and is defined by the Oxford

00:17 Dictionary as being the system of compulsory payments to provide state assistance to people

00:22 who are unemployed, poorly or retired.

00:25 As a result, it acts as a fundamental basis for the welfare system wherein the amount

00:29 that you pay towards it entirely depends on your employment status and how much you earn.

00:35 If national insurance were to be scrapped altogether, it's highly likely that income

00:39 tax would increase.

00:41 Any rise in income tax would then affect pensioners who do not currently pay national insurance.

00:46 Jeremy Hunt has since told Sky News that the government has done a "enormous amount"

00:51 for pensioners and that growing the economy would ultimately help to increase the state

00:56 pension.

00:56 [BLANK_AUDIO]

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