Changes to employer National Insurance Contributions
How will they impact your Group Income Protection with Generali UK Employee Benefits?
What will be affected?
Employers with a Secondary Class 1 National Insurance Contributions (NICs) liability, or with employees with earnings of at least £5,000 a year.
Overview of the changes
On 6 April 2025, the threshold at which employers start paying Secondary Class 1 NICs will be reduced from £9,100 to £5,000 a year. This will remain in effect until 5 April 2028, after which it will be increased in line with the Consumer Prices Index (CPI).
Additionally, the Secondary Class 1 NICs will increase from 13.8% to 15%. And the maximum Employment Allowance – the amount by which eligible employers can reduce their NI liability - will increase from £5,000 to £10,500.
What Group Income Protection policies are impacted?
- Existing Group Income Protection policies where the policy insures NICs; and
- New Group Income Protection policies going on risk from 6 April 2025, where the policy insures NICs.
How will these Group Income Protection policies be affected?
- Existing Schemes as at 6 April 2025:
Schemes with employer NIC's will automatically be covered for changes in Class 1 NIC's from 6 April 2025 without triggering a rate review.
Where premiums are calculated using a rate based on Scheme Salary, there will be no impact in the calculation method of premiums due. Where the rate is quoted in terms of benefit, insured benefit levels will be impacted and therefore premiums will be impacted too. This will be picked up at the next premium adjustment at the end of the policy year
- New schemes:
The new NIC's will be insured post 6th April 2025.
Will there be any changes to claims already in payment before 6 April 2025?
There will be no change to the benefit payable for claims already in payment or where the deferred period ends before 6 April 2025.
And what about claims from 6 April 2025 onwards?
For claims where the deferred period ends on or after 6 April 2025, the benefit payable will include the new NICs where Employer NIC's are covered under the policy.
Please contact EB.Enquiries@Generali.co.uk or your usual Generali Business Development Manager if you require any further information or assistance.