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National Insurance

1. Full time work 2. Part time work 3. Understanding payslips
4. National Insurance 5. P45 and P60 explained 6. Income tax
7. Tax codes - what are they? 8. Pension 9. Getting a job

4. What does National Insurance pay for?

Your National Insurance payments go towards state benefits and services, including:

  • The NHS;
  • The State Pension;
  • Unemployment benefits;
  • Sickness and disability allowances

 

Do I have to pay?

You will pay National Insurance when you are 16 and over and you are either:

  • An employee earning more than £162 a week (2018-2019 tax year);
  • Self-employed and making a profit of £6,205 or more a year

Your National Insurance number is a unique number given to you just before you reach the age of 16.  This number will stay with you throughout your life and is made up of letters and numbers.  Your number makes sure you pay the correct National Insurance contributions and tax.  You will find your National Insurance number on:

  • Your payslip;
  • Your P60;
  • Letters about your tax, pension or benefits;
  • Your National Insurance section of your personal tax account;

Your National Insurance number is used for different organisations like:

  • HM Revenue and Customs (HMRC);
  • Your employer;
  • Local Council;
  • Department of Work and Pension;
  • Electoral Registration Officers;
  • Student Loan Company, if you apply for a student loan

Your national insurance goes towards your state pension and helps with qualifying for certain benefits.

 

What if I don't receive a National Insurance number?

National Insurance numbers are generated by child benefit payments, so as long as there is a child benefit claim in place, a number will automatically be issued.  In the case of children in public care the social worker apply for the number.

The number is issued on a letter and this must be kept safely as it will be required when starting work or college or signing on for benefits.  In the event of a lost number ring HMRC on 0300 200 3500.

 

How much do I pay?

The amount of National Insurance depends on how much you earn and your employment status.

 
Employed

If you are employed, the rates for 2018-2019 tax year are:

Your Pay Class 1 National Insurance rate
£162 - £892 a week (£702 - £3,863 a month) 12%
Over £892 a week (£3,863 a month) 2%


Your National Insurance will be paid with your tax.  Before you get paid, your employer will take this away from your wages but it will show on your payslip your contributions. 

 
Self-employed

If you are self-employed your National Contributions will depend on your profits.  You have to pay this yourself through Self Assessment.

 
Not Working

If you are not working then some benefits could be affected if there is gaps in your National Insurance record.  You can fill in these gaps through National Insurance credits which if you are not working you can get if:

  • You can't work because of illness;
  • You are unable to work due to caring for someone

However, if you are not working or not getting credits you can top up your National Insurance with Voluntary Contributions to fill in any gaps.

 

Change of Circumstance

If you have any changes in your circumstances you must tell HM Revenue and Customs (HMRC) if you have:

  • Had a change of your personal details, for example name change, address, marital status;
  • Become self-employed;
  • Stopped being self-employed


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Understanding payslips
P45 and P60
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