Changes to National Insurance Contributions (NICs) from April 2025

Impact on Group Income Protection (GIP) policies

What’s changing

The Government has announced that from April 2025, the rate of employer NICs will increase from 13.8% to 15%, and the per-employee threshold above which Employer NICs are payable (the Secondary Threshold) will reduce from £9,100 to £5,000 a year.

Impact on GIP policies

The change will impact GIP policies where employer NICs are insured. We will cover the higher rate of employer NICs from April 2025.

Claims

• New claims from 6th April 2025
  For claims where the deferred period ends on or after 6th April 2025 the benefit payable will include  the increased employer NICs.
• Claims in payment before 6th April 2025
  We provide cover for the employer NICs payable on the benefit as at the start of the claim. As a result there will be no change to the benefit payable for:
  • Claims in payment 
  • Claims where the deferred period ends before 6th April 2025 

Premiums

• Unit rated policies within the rate guarantee
  The change to employer NICs will not trigger a rate review. 
  For most GIP policies the premium is expressed as a rate of total salary roll which means there will be no change to the annual premium as a result of the increase in NICs.  
  For policies where the premium is expressed as a rate of insured benefit there will be an increase in premium as the insured benefit will increase. Adjustments to premium will take place at the end of the policy year.
• Rate reviews and new policies going on risk
  The unit rate quoted at the next rate review date will take account of the increased employer NICs. This will also be the case for quotations for new policies going on risk.
• Single premium costed policies
  For these policies we use a rate table to calculate the premium for each member and then add them together. As the premium rate is applied to the insured benefit there will be an increase in premium resulting from the higher cover provided. Adjustments to premium will take place at the end of the policy year.