The state pension and National Insurance in 2024: two rate cuts and an 8.5% rise
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Employee National Insurance fell from 12% to 10% in January 2024, then to 8% in April — two cuts in one year. Meanwhile the full state pension rose to £221.20 a week. Here is the arithmetic on both.
National Insurance was cut twice within four months in 2024 — from 12% to 10% in January, then to 8% in April — while the full state pension rose 8.5% in the same period. A worker on £35,000 a year saw their take-home pay rise from both changes and, separately, a pensioner on the full new rate saw their weekly payment rise from £203.85 to £221.20. Neither change affects the other, which is worth being clear about before assuming a lower NI rate today means a smaller pension later.
Two National Insurance cuts in one year
Employee Class 1 National Insurance is charged on earnings between the primary threshold and the upper earnings limit. For 2024/25, HMRC's published rates and thresholds put those at £12,570 a year (£242 a week) and £50,270 a year (£967 a week) respectively — unchanged from 2023/24, so only the rate itself moved. It moved twice:
| Period | Main employee NI rate | Annual NI on a £35,000 salary |
|---|---|---|
| Before 6 January 2024 | 12% | £2,692 |
| 6 January – 5 April 2024 | 10% | £2,243 |
| From 6 April 2024 | 8% | £1,794 |
On a £35,000 salary, earnings above the £12,570 threshold are £22,430 a year. At the 2023 rate of 12% that was £2,692 in NI; at the current 8% rate it is £1,794 — a saving of roughly £898 a year from the two cuts combined, with no change to the threshold or to income tax alongside it. Both cuts applied automatically through payroll; nothing needed to be claimed.
The state pension rose 8.5% in the same year
Separately, the full new State Pension — paid to people who reached state pension age after April 2016 with a full National Insurance record — rose 8.5% for the 2024/25 tax year, from £203.85 to £221.20 a week. Over a full year that is roughly £11,502, up from about £10,600 the year before. The older Basic State Pension, paid to people who reached pension age before April 2016, rose to £169.50 a week on the same date.
The increase follows the triple lock: each April the state pension rises by whichever is highest of average earnings growth, inflation (CPI to the previous September), or 2.5%. The 8.5% figure for 2024/25 came from earnings growth, which is why it moved by more than inflation was running at the time. The current rates are published directly by the Department for Work and Pensions on GOV.UK.
Why a lower NI rate does not mean a smaller pension
It is a reasonable question: if less National Insurance is being paid, does that eventually mean a smaller state pension? No — the two systems are connected by eligibility, not by amount. What determines the size of your eventual state pension is the number of qualifying years of National Insurance contributions or credits, typically 35 years for the full amount and at least 10 for any pension at all. A qualifying year requires earning above a lower threshold for long enough during the year, regardless of whether the rate charged on that income was 12%, 10%, or 8%. Paying NI at a lower rate on the same qualifying earnings still counts as a full qualifying year. The rate is a tax rate; the pension is an entitlement earned through years, not pounds.
The state pension calculator estimates your entitlement from your National Insurance record, and the pension guide covers how workplace and personal pensions sit alongside it.
Who the NI cuts helped, and by how much
The saving from the rate cuts scales with earnings, up to the upper earnings limit, and then flattens — above £50,270, additional income is charged NI at a separate, much lower rate that did not change in 2024. A worker on £25,000 saved roughly £494 a year from the two cuts combined; a worker on £60,000 saved close to the maximum possible, around £1,508, because almost all of their earnings up to the upper limit benefited from the full four-point reduction. Someone earning below the £12,570 threshold paid no employee NI either before or after the change and saw no direct effect from either cut.
A widely used deadline to fill gaps in your record ran through 2024
Separately from the rate and pension changes, 2024 was also the tail end of an unusually generous window for topping up a National Insurance record voluntarily. Normally, gaps in your record can only be backfilled for the previous six tax years, but an extended arrangement allowed anyone under state pension age to fill gaps as far back as April 2006 — nearly two decades — right through to the deadline of 5 April 2025. For someone with a handful of missing years, most commonly from time spent abroad, self-employment with low profits, or a career break, buying back a single qualifying year at the standard Class 3 rate can add roughly 1/35th of the full state pension for the rest of their retirement — often worth many times the cost of the contribution itself within a few years of drawing the pension. Checking your own record and any gaps in it is done through your personal tax account on GOV.UK, not automatically.
What this is worth for planning, not just payday
A recurring NI saving is easy to absorb into everyday spending without noticing it, which is exactly why it is worth deciding what to do with it deliberately. Redirecting an ongoing £75 a month saving into a pension or ISA compounds meaningfully over a working life — the pension contributions calculator shows what a specific monthly addition is worth by a chosen retirement age, using the same qualifying-years logic as the state pension itself layered on top of whatever workplace or personal pension is already running.
This is general information, not financial or tax advice. National Insurance rates, thresholds and state pension amounts are set annually and can change again from April 2025. For a decision about your own record or retirement planning, check your state pension forecast on GOV.UK or speak to a regulated financial adviser.