UK National Insurance Scheme Finance

The purpose of National Insurance is to allow each person in the UK the chance to amass contributions for state benefits. These benefits are: Bereavement Allowance; Contribution-based Jobseeker’s Allowance; State Pension; Contribution-based Employment and Support Allowance.
The amount of contribution the government expects people to pay varies. It depends on the level of income, and whether someone is self-employed or works for an employer. The income thresholds change annually.
The requirement to pay National Insurance Contributions does not last for a lifetime. It stops when a UK citizen reaches the age at which he or she can receive the State Pension.
Who Pays?
People must pay National Insurance from age 16 onwards if they are working. Contributions start when income reaches a level that the government sets each year. Contributors must be self-employed or employed.Voluntary Payments
Standard National Insurance contributions are obligatory. It’s also possible to pay National Insurance contributions on a voluntary basis.People do this when:
- They reside abroad but wish to keep their entitlement to the UK State Pension
- They have failed to pay sufficient National Insurance contributions during a year for the State Pension or other benefits
- They do not work and do not claim state benefits
How Much?
Employed people pay Class 1 National Insurance contributions. The lower level is 12% of earnings. The levels apply at certain income thresholds. Those who belong to an employer’s contracted-out Pension Scheme pay a lower rate.Employers deduct the contributions from wages along with income tax.
Self-employed people pay Class 2 and Class 4 National Insurance contributions. Class 2 is a flat weekly rate of £2.95. Class 4 is a percentage of taxable profits and has two levels: 9% on earnings from £8,424 up to £46,350 plus an additional 2% on anything over £46,350.
For the latest details of all National Insurance income and percentage thresholds, contact HMRC (Her Majesty’s Revenue & Customs).
Credits
In some circumstances, people can receive National Insurance credits. These replace contributions that people cannot make because they’re not able to work. Someone may be ill, for instance, or acting as a carer.Class 1 credits cover payments for the bereavement allowance, the State Pension and other benefits. Class 3 credits apply to bereavement benefits, the State Pension and nothing else.
Access
Access to the National Insurance scheme is by a National Insurance number. This number is also each person’s reference number for all aspects of the UK social security system.The first two symbols and the last one of a National Insurance number are actually letters. There are six numbers in between these. A National Insurance number stays the same throughout someone’s life.
Those who live in the UK and whose parents or guardians receive child benefit for them should receive a National Insurance number before they reach 16 years of age.
Those who do not have a National Insurance number must contact the National Insurance Registrations Helpline. The phone number is 0845 915 7006. The helpline opens from 8 a.m. to 5 p.m., Monday to Friday.
Re: What if Work Makes You Ill?
Hi, Since last March when the first lockdown was implemented ive been going into the office with two others girls.The rest of the…
Re: Understanding Your Employment Contract
I work 38hrs in 4 days on a night shift how many hours overtime can I do. 2000 0600 mon to thurs
Re: Employer Has Changed My Shifts: What Are My Rights?
I have been working night shifts only for over 5 years, my manger refuses to give me rotation of day…
Re: When Your Employer Changes Your Working Hours
i have been working for a retail company since march 2020. i am i college student and when i started, they…
Re: Returning to Work After Absence Due to Anxiety or Depression
I've been off work due to anxiety fron the 29th of Dec due to a high anxiety job that I…
Re: Sickness: Your Rights
I've been off work for nearly 3 month and the doctor was giving me sick notes once a month , and I was ringing work to let them know , now…
Re: Employer Has Changed My Shifts: What Are My Rights?
I have been working 0600 to 1400 shift and now my employer is changing my start time to 0300 until…
Re: Returning to Work After Absence Due to Anxiety or Depression
Hi I’ve been off work since about the same time as you. Exactly the same. Anxiety which…
Re: Employing Your Spouse
Hi I have a question, First this is my current situation. I am a retired teacher drawing a small ish professional pension and working as…
Re: Sickness: Your Rights
I was off from work sighned off by doctor for depression when my sick note ran out I was called in for a back to work interview where the…