Connor Read: Hi everyone, I’m here again with Chris Green, Head of Financial Planning here at City Asset Management. We’ve already spoken about pensions, business relief, and inheritance tax, and now we’re going to cover a few more points about the recent budget.

So, Chris, turning to National Insurance, there were fairly big changes, I think, to employer National Insurance, although employee National Insurance was supposedly left to one side. With employer National Insurance increasing to 15% from 13.8%, and the threshold also increasing from when employers start paying National Insurance contributions, do you think that this is a significant change?

Chris Green: I think if you ask most business owners, they’ll tell you, yes, it is a significant change. I mean, the threshold itself moved down to £5,000 from £9,100, so that in itself adds a £615 tax bill to the employer for every employee, plus that increase up to 15%. That’s a 1.2% increase, which is around a 10% increase for employer National Insurance, which is pretty huge. That’s obviously going to feed through to the economy in terms of pressure on wage increases for employees. So, I think for employers, yes, it’s a big increase and something they’re going to have to really plan around and think about.

Connor Read: Is there any way that we can mitigate this change at all?

Chris Green: On the face of it, no, there’s not. The only thing you can do around employer National Insurance for employees are pension contributions using salary sacrifice, as pension contributions are not subject to employer National Insurance. That was another one of those things that was highlighted before the budget that could have come into the scope, but that’s not the case. So obviously, if you sacrifice £1,000 worth of salary and have that paid as an employer’s pension contribution, then you save the National Insurance on that £1,000.

Connor Read: So, there are some savings, but it sounds like mostly: “it is what it is”.

Chris Green: Yes, it is what it is.

Connor Read: And obviously, the National Insurance contributions feed into the state pension eventually. So, does this affect the state pension in any way?

Chris Green: No, it doesn’t. National Insurance is now just much more of an additional tax-raising tool for the government. The state pensions triple lock remains, so we know that state pensions are going up by 4.1% in April, so no changes there. It’s really important for people to make sure that they check their National Insurance record. If you haven’t got a Government Gateway login then get yourself one; you can see your NI history, see if there are any gaps or any holes, and talk directly to the DWP to see what you can do in terms of bridging those gaps. You may want to pay additional contributions to get yourself up to the 35 years to qualify for the full state pension, which is becoming more and more valuable. The last time we looked, the value of a state pension was like having a pension pot of around £250,000, so not insignificant.

Connor Read:Absolutely, and an increase of 4.1% being above inflation is certainly worthwhile to look into.Well, thank you, Chris. I think that’s all we have time for today. Thank you, everyone, for listening.