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Glossary entry · The silent subtractors
National Insurance
Definition
A UK contribution paid by employees on earnings above a threshold (Primary Threshold). For 2024/25 it is 8% on earnings between £12,570 and £50,270, then 2% above. NI funds the State Pension, the NHS, and a few other contributory benefits.
Example
On a £40,000 salary, an employee pays 8% National Insurance on £27,430 = ≈ £2,194/year.
Related
The silent subtractors
Fee
A charge taken from your investment by a fund, broker, or advisor, every year, forever.
Read →Tax
The other silent subtractor. Almost every gain you make is taxed somewhere.
Read →Expense ratio
The annual fee a fund charges, expressed as a percentage of your investment.
Read →Commission
A fee charged by a broker each time you buy or sell. Mostly $0 with modern brokers.
Read →