National Insurance is a key component of the welfare state and pays out benefits. It is paid by employees and employers on earnings and by self-employed people on profits above a certain threshold.

Your National Insurance number is made up of two letters and six digits, it never changes and is unique to you. You can check your NI number online.

About NI

The National Insurance system is the basis for entitlement to a state pension, some contributory benefits and the NHS. It is a form of taxation similar to income tax, but only paid on earnings rather than investment income.

The system is funded by contributions from individuals, employers and self-employed people. The amount of money paid depends on how much you earn and whether you are employed or self-employed. Most workers pay NIC automatically through the PAYE system (your employer takes it from your wages), but those who are self-employed will make payments through their Self Assessment tax return.

If you are not paying enough NI, you may miss out on important contributory benefits such as the state pension. You can find out if you have gaps in your contribution record by getting a statement from HMRC.

NICs are paid at different rates and classes, and there are special rules for the self-employed. Employees pay class 1 NIC which is automatically deducted from their wages, and employers also pay class 2 NIC on employees’ earnings over a certain threshold. The self-employed pay class 4 NIC through their self-assessment tax return.

Individuals can also pay voluntary NIC to top up their contributions and protect future entitlement to benefits. You can do this online or over the phone, and details are on our NI website.

Contributions

National Insurance contributions (NICs) fund the United Kingdom’s social benefit programs, including retirement pensions and unemployment benefits. Employers withhold employee contributions through payroll deductions and self-employed individuals make their own payments. NICs are one of the largest sources of income tax revenue for the UK government.

You pay different amounts of NICs depending on your type of work. Class 1 NICs are paid by employees and are automatically deducted from your wages. Class 2 NICs are paid by the self-employed and are based on profit levels above an annual lower profits limit and below an annual upper profits limit. Self-employed individuals also pay NI credits on their business profits in addition to paying Class 2 NICs. These credits can count towards a State Pension.

When you start paying NICs, the government will send you a personalised NI number that is unique to you. Your NI number is usually included on your wage slips or letters from HM Revenue and Customs and it will help the department find your records.

When you check your NI record, the website will show you all of the NICs you have paid or received over your lifetime. It will also tell you if you have any gaps in your contribution record which may affect your State Pension entitlement. You can pay voluntary NICs to fill these gaps in your record if you want to.

Benefits

National Insurance (NI) is a form of social security in the United Kingdom that helps to pay for state benefits like the new State Pension, Jobseekers’ Allowance and Maternity and Paternity Pay. Unlike income tax, where every person pays the same rate, NICs vary depending on an individual’s earnings and how they work. Employees are usually paid a percentage of their earnings in NI, while the self-employed must pay both Class 1 and Class 2 NIC based on their profits. These contributions help to build up an entitlement to certain state benefits at a time of need, such as sickness, bereavement and unemployment.

Those who are employed get their NI automatically deducted from each paycheck and are able to see how much they have paid through their payslips. The same applies to the self-employed who pay NI through their annual tax return and must check they have paid all the correct amounts of both Class 1 and Class 2.

The UK government’s aim is that people will be able to retire with a secure income based on their record of NI payments. The minimum level required is 35 years of NICs, or equivalent payments in other ways, to get the full State Pension. However, people who have gaps in their NI payment history will be able to top up those periods by paying voluntary contributions.

Contact us

There are many ways to get in touch with HMRC if you have a National Insurance question. You can call them, visit one of their offices, send them a letter or use their online contact form. If you’re writing to them, keep a copy of your query so you can refer back to it later.

If you need to prove your identity, you can do so by uploading digital photos of yourself and documents. You’ll also be asked to answer questions about yourself.

National Insurance is a system of taxation in the United Kingdom that pays for pensions, unemployment benefits and other social security programs. It’s similar to the FICA system in the United States, which funds Social Security and Medicare. People pay NI contributions based on their earnings and circumstances. In most cases, your employer deducts NIC payments from your wages. Self-employed people pay Class 1 NIC through their Self Assessment tax return and possibly Class 2 NIC depending on their profits. Some people can also claim National Insurance credits if they’re unable to work because of illness or caring for someone. אתר ביטוח לאומי