National Insurance contributions – what are they?
If you’re 16 or over and earning £97.01 or more a week, you will usually have to pay National Insurance contributions. This is currently 11% of whatever you earn over £97 and 1% over £645 a week and your employer will take it out of your wages at the same time as your income tax. £97 a week is officially known as the ‘earnings threshold’. National Insurance contributions are important, and it’s worth taking the time to understand some of the other technical jargon, like the ‘Lower Earnings Limit’ which is £82 a week and the ‘Upper Earnings Limit’ which is £645 a week, but more about them later. National Insurance is used to pay benefits, like the state pension, and fund the NHS.
Everyone who is born in the UK should be given a National Insurance number automatically. It should be sent to you before your 16th birthday. It will look something like this MA 10 20 30 B – that is two letters followed by three pairs of two numbers followed by a final letter.
If you’re over 16 and you haven’t been sent your National Insurance number yet or you can’t find it, contact the National Insurance Registrations Helpline. The number to ring is 0845 91 57006 or 0845 91 55670.
If you weren’t born in the UK, you should still be sent your National Insurance number. If for some reason you don’t get it, you’ll need to get in touch with the Department for Work and Pensions (DWP) and they’ll sort it out.
You should give your National Insurance number to your employer as soon as you start work.
You’re probably wondering why you have to pay this when you’re already paying tax. Well, this is different. The tax you pay helps to keep the country running, but by paying National Insurance contributions you build up your entitlement to financial support at times when you cannot work; if you are sick or unemployed or for when you have retired. And the National Insurance contributions you make go towards financing benefits for everyone.
