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National Insurance Contributions: Young People

Question for Treasury

UIN 176140, tabled on 25 March 2021

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of exempting (a) employers of people aged 25 and (b) people aged under 25 from national insurance contributions to (i) boost youth employment and (ii) increase and improve training of employees under 25.

Answered on

19 April 2021

The Government has taken significant action to reduce the cost of employing young people. Since April 2016, employers do not pay employer National Insurance contributions (NICs) for apprentices under the age of 25 on earnings up to the Apprentice Upper Secondary Threshold (£967 a week in 2021-22). This builds on action the Government has already taken to remove employer NICs on those aged under 21 up to the Upper Secondary Threshold (£967 a week in 2021-22) in April 2015.

The Government is committed to keeping taxes low to support working people to keep more of what they earn and to encourage individuals to progress, ensuring work always pays. In April 2020, the NICs Primary Threshold – the level of earnings at which employees start paying NICs – was increased to £9,500. This provided a tax cut to about 31 million people, with a typical employee saving about £104. As announced at the recent Spending Review, the Primary Threshold will increase to £9,568 in 2021-22.

Answered by

Treasury