In the UK, you need to pay National Insurance contributions in order to qualify for certain state benefits. Once you are eligible to pay National Insurance you will be assigned a National Insurance Number.
Just before your 16th birthday, you will receive a letter from HMRC containing your National Insurance (NI) Number. Your NI number will also appear on your payslips, P45, P60 or any letters about your tax, pension or other benefits.
If you forget your NI number you can contact HMRC who will be able to help you.
What is it used for?
National Insurance contributions are used to pay for certain state benefits and pensions including:
- Basic State Pension
- Additional State Pension
- New State Pension
- Maternity Allowance
- Bereavement Support Allowance
- Contribution-based Job Seeker’s Allowance
- Contribution-based Employment and Support Allowance
When do you have to pay it?
You will need to make National Insurance contributions if you are aged 16 or over and:
- An employee earning more than £183 per week
- Self-employed and making a profit of £6475 or more each year
If you are employed, your employer will deduct National Insurance contributions from your wages and this will appear on your payslip. People who are self-employed will need to make their own contributions using the government’s ‘self-assessment’ tool on their website.
There are different classes of National Insurance that specify how much you need to pay. The class of National Insurance you pay depends on your employment circumstances.
Class 1 – Employees earning over £183 per week will pay 12% of their earnings and employees earning over £962 will pay 2%.
Class 2 – People who are self-employed and profits are more than £6475 per year will pay a flat rate each week.
Class 3 – Voluntary Contributions.
Class 4 – People who are self-employed and profits are over £9501will pay a rate depending on their company profits.
Can you pay too much National Insurance?
If you ever think you have paid too much National Insurance or have made contributions when you shouldn’t have, you can claim a refund by contacting HMRC.
