The independent research institute has urged Government ministers to re-think proposals for a planned National insurance increase. From April 6, 2022 to April 5, 2023 National Insurance contributions will increase by 1.25 percentage points in the UK.

The Government has said that the changes are expected to raise £12billion a year to help support the NHS.

A proportion of the funds will be put towards the UK’s social care system.

However, NIESR has highlighted that more than one million UK households could be classed as destitute following the rise.

As such, millions of people will be unable to buy basic essentials such as food and clothing.

NIESR has also suggested that Northern Ireland could face a surge in poverty.

25,000 households in Northern Island are expected to fall into extreme poverty following the National Insurance increase, according to NIESR.

This is due to the combined effects of higher consumer prices and higher National Insurance contributions.

NIESR’s economic model uses data such as employment rates and wages to estimate the impact of different scenarios on UK regions.

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Campaigners have urged the Government to scrap the NI increase at a time when households are already struggling with rising energy bills and living costs.

Many have argued that the rise will have a greater impact on lower-income earners.

Business leaders have also warned that firms could offset the rise by hiking up prices for consumers.

Annual Consumer Price Index (CPI) inflation rose to 5.4 percent in December last – a 30-year high.

It is predicted to hit seven percent this spring.

Also, the cost of the weekly shop rose at its fastest rate in a decade last month.

Market insights group Kantar believes consumers can expect to pay £180 more on average this year for their groceries than last year.

According to retailers, the cost of goods will continue to climb throughout 2022.

From April 2023, National Insurance will go back down to 2021 to 2022 levels.

The levy will then become a separate new tax of 1.25 percent, collected as a new Health and Social Care Levy.

National Insurance contributions (NICs) are a tax on earnings and self-employed profits.

It is paid by employees, employers and the self-employed. National Insurance contributions can help to build a person’s entitlement to state pension and other benefits.