How much NI will you save?

The National Insurance saving you can make depends on how much you earn and the level of your contributions to the Lifestyle Plan. For the current tax year (2007/8) the National Insurance rates have been set at:

• 11% on annual earnings up to £34,840;
• 1% on annual earnings over £34,840.

To give you an idea of the potential increase to your annual take-home pay with PaySmart, we'll take an example employee. If they are under 40, earn £20,000 a year and pay 5% contributions, then the employee's contributions would be £1,000 a year. Through PaySmart, NI savings would be £110 (11% of £1,000) a year.

The calculator includes your allowance for your annual National Insurance savings based on the different contribution rates. The saving per year is relatively modest, but you could put that little bit extra towards your pension and over the years it could make a big difference.