You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension. The contributions you pay depend on how much you earn and whether you're employed or self-employed. You stop paying National Insurance contributions when you reach State Pension age.
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You pay National Insurance contributions if you're an employee or self-employed and you're aged 16 and over, as long as your earnings are more than a certain level. If you're employed you stop paying National Insurance contributions as soon as you reach State Pension age. If you are self-employed, you stop paying Class 2 contributions as soon as you reach State Pension age and Class 4 contributions from the start of the tax year after the one in which you reach State Pension age.
State Pension age is 65 for men born before 6 December 1953 and 60 for women born before 6 April 1950. State Pension age for women born on or after 6 April 1950 is gradually increasing and will reach 65 in November 2018. From December 2018, State Pension age for women and men will gradually increase from 65 and reach 66 by October 2020.
Some people also pay voluntary National Insurance contributions. For example, you might choose to pay them if you:
Your National Insurance number is your own personal account number. The number makes sure that the National Insurance contributions and tax you pay are properly recorded on your account. It also acts as a reference number for the whole social security system.
Every National Insurance number is different. It's made up of letters and numbers like this:
QQ 12 34 56 A.
(Please note that this National Insurance number is just an example and should not be used as your own number).
Your National Insurance number never changes even if you go abroad, marry, register as a civil partner, change your name, etc.
Your entitlement to many state benefits depends on your National Insurance contribution record (see the section below 'State benefits that depend on National Insurance contributions').
If you don't have a National Insurance number, you can apply to get one.
You will have to give your National Insurance number to:
You also have to give your National Insurance number if you open an Individual Savings Account (ISA) - follow the first link below for more information.
It's very important you keep your number safe and don't give it to anyone who does not need it. This will help prevent identity fraud - follow the second link below to find out more about protecting your identity.
Your entitlement to certain state benefits and the amount you can get depends on your National Insurance contributions record. (In some cases it depends on your spouse or civil partner's contributions.) These benefits include:
You can find a full list of the state benefits that depend on your contributions in the guide 'National Insurance and state benefits'.
The amount and type of National Insurance contributions you pay depend on whether you're employed or self-employed and how much you earn. The rates shown below are for the 2013-14 tax year.
If you're employed you pay Class 1 National Insurance contributions. The rates are:
You pay a lower rate if you're a member of your employer's contracted-out pension scheme.
Your contributions are deducted from your wages by your employer.
If you're self-employed you pay Class 2 and Class 4 National Insurance contributions. The rates are:
If your profits are expected to be less than £5,725 you may not have to pay Class 2 National Insurance contributions.
Your Class 2 National Insurance contributions payments are due on 31 January and 31 July, the same as a Self Assessment tax bill. You pay Class 2 National Insurance contributions either monthly or six monthly by Direct Debit – follow the first link below for more information about payment dates.
You pay Class 4 National Insurance contributions when you pay your Income Tax.
You can pay voluntary contributions (usually Class 3 National Insurance contributions) at a flat rate of £13.55 a week.
Class 3 voluntary contributions are paid either monthly by Direct Debit or by quarterly bill. But if you have gaps in your National Insurance contributions record you can make one-off payments of voluntary contributions to fill these.
There are other rates that apply in certain cases. Examples of these are:
You can sometimes get National Insurance credits. These are available in certain circumstances to give you 'credit' to cover contributions you couldn't make because you weren't able to work. They can protect your entitlement to certain benefits including the State Pension.
If you have to pay National Insurance you normally have to pay Income Tax too. Income Tax is a tax on your 'taxable income' over a certain amount. It's payable at different rates depending on your income. There are some allowances and reliefs available that can lower your Income Tax bill.
HMRC keeps records of your National Insurance contributions paid throughout your working life. Find out how to check your National Insurance record by following the link below.
If you are resident abroad or have been abroad and want to check your National Insurance record, contact the National Insurance Contributions Office - International Caseworker by following the link below.