Pre-Budget report: National insurance will rise by further 0.5%

Chancellor Alistair Darling announced today that he intends to increase all employer, employee and self-employed rates of national insurance (NI) by a further 0.5% from April 2011.

In last year's Budget, the Chancellor increased all NI contributions by 0.5% for all employees and employers and today's announcement will be on top of that.

However, the starting point from which national insurance is payable will also be raised. No-one earning under £20,000 will pay any more national insurance contributions as a result.

He said the move will raise £3billon a year from 2011-12. “As a result, Mr Speaker, I am today able to offer guaranteed minimum real terms increases in spending on front-line NHS and schools for two years from 2011."