National Insurance
1. Overview
You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension.
You pay National Insurance if you’re:
- 16 or over
- an employee earning above £153 a week
- self employed and making a profit over £5,885 a year (unless you get an exception)
The exact amount you pay depends on:
- how much you earn
- whether you’re employed or self-employed
You may also want to pay voluntary contributions to make up for gaps in your National Insurance record. For example, you can have a gap when you weren’t working and didn’t get any state benefits.
When you stop paying
If you’re employed, you stop paying Class 1 National Insurance when you reach the State Pension age.
If you’re self-employed you stop paying:
- Class 2 National Insurance when you reach State Pension age (or up to 4 months after this to pay off any contributions you owe)
- Class 4 National Insurance from the start of the tax year after the one in which you reach State Pension age
2. Your National Insurance number
Your National Insurance number makes sure your National Insurance contributions and tax are only recorded against your name.
It’s made up of letters and numbers and never changes.
You can apply to get a National Insurance number if you don't have one.
Who uses your National Insurance number
These organisations need to know what your number is:
- HM Revenue & Customs (HMRC)
- your employer
- the Department for Work and Pensions (which includes Jobcentre Plus and the Pension, Disability and Carers Service), if you claim state benefits, or in Northern Ireland the Department for Social Development
- your local council, if you claim Housing Benefit, or the Northern Ireland Housing Executive
- the Student Loan Company, if you apply for a student loan
- your ISA provider, if you open an ISA
To prevent identity fraud, keep your National Insurance number safe and don't give it to anyone who doesn't need it.
3. National Insurance contributions - how much you pay
If you’re employed
You pay Class 1 National Insurance contributions. The rates are:
- 12% on your weekly earnings between £153 and £805
- 2% on any weekly earnings over £805
You pay National Insurance with your tax. Your employer will take it from your wages before you get paid.
If you're a director of a limited company, you may also be your own employee and pay National Insurance Class 1 through your PAYE payroll.
If you’re self-employed
You're responsible for paying your own National Insurance. How much you pay depends on your profits:
| Annual profits | Class 2 | Class 4 |
|---|---|---|
| Up to £5,885 | £0 but only if you get an exception | £0 |
| £5,885 - £7,956 | £2.75 a week | £0 |
| £7,956 - £41,865 | £2.75 a week | 9% of profits from £7,956 up to £41,865 |
| More than £41,865 | £2.75 a week | 9% of profits from £7,956 up to £41,865 and 2% over that amount |
You pay Class 2 either via direct debit once a month or every 6 months or you can ask HMRC to bill you twice a year. Your Class 4 contributions will be paid with your Income Tax. You can set up your payments when you register for Self Assessment or change how you pay.
If you're employed and self-employed
You might be an employee but also do self-employed work. In this case your employer will take care of your Class 1 payments and you have to pay your Class 2 and 4 payments like any other self-employed person. How much you pay when employed and self-employed depends on your combined income from all your jobs.
If you’re a share fisherman
If you’re a share fisherman - ie you’re employed on a British fishing boat but not under a contract of service - you pay a different Class 2 rate. In 2014 to 2015 the rate is £3.40 a week. This contributes towards the basic State Pension, the normal range of benefits for self-employed people, plus Jobseeker’s Allowance.
Reduced rates
There are reduced rates for some married women and widows and if you have a separate, ‘contracted out’ pension scheme through your employer.
Voluntary contributions
You can pay voluntary National Insurance contributions to cover or avoid gaps in your National Insurance record. You may have gaps from times when you didn’t pay contributions, eg you weren’t working and not claiming benefits.
There's a full list of National Insurance rates on the HMRC website.
4. What National Insurance is for
National Insurance contributions count towards the benefits in the table.
| Benefit | Class 1: employees | Class 2: self-employed | Class 3: voluntary contributions |
|---|---|---|---|
| Basic State Pension | Yes | Yes | Yes |
| Additional State Pension | Yes | No | No |
| Contribution-based Jobseeker’s Allowance | Yes | No | No |
| Contribution-based Employment and Support Allowance | Yes | Yes | No |
| Maternity Allowance | Yes | Yes | No |
| Bereavement benefits | Yes | Yes | Yes |
Class 4 contributions paid by self-employed people with a profit over £7,956 don’t count towards state benefits.
5. Help if you're not working
Your benefits could be affected if there are gaps in your National Insurance record. National Insurance credits help protect them.
You can get credits if you can’t pay National Insurance contributions, for example, if:
- you can’t work due to illness
- you’re caring for someone
Read more about National Insurance credits to see if you qualify and how to apply.
If you're not working or getting credits you can also top up your National Insurance with voluntary contributions.
6. National Insurance record check
Check your National Insurance record
Apply to HM Revenue & Customs (HMRC) to check your National Insurance record.
HMRC will write to you after you applied and let you know what the next steps are.
7. Change of circumstance
If your address or name changes or you get married or enter a civil partnership you must contact HMRC.
If you start or stop self-employment you need to contact HMRC and let them know.
HMRC National Insurance line
Telephone: 0300 200 3505
Textphone: 0300 200 3519
Monday to Friday, 8:30am to 5pm
Find out about call charges