The 1.25 percentage point rise in National Insurance announced by the government yesterday means the UK tax burden has reached its highest rate since 1950 (35.5 per cent of GDP). One particularly squeezed group is university graduates.
After what amounts to a 10 per cent increase in National Insurance for most taxpayers, graduates earning more than £27,295 will pay a marginal tax rate of 42.25 per cent once student loan repayments are included (20 per cent income, 13.25 per cent National Insurance, 9 per cent loan repayments). By contrast, a non-graduate earning up to £50,270 will pay 33.25 per cent. A graduate who earns more than £50,270, meanwhile, will pay a marginal rate of 52.25 per cent, while a non-graduate earning up to £100,000 will pay 42.25 per cent.
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