National Insurance

National Insurance - the basics

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.

Who pays National Insurance?

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 April 1959 and 60 for women born before 6 April 1950. But it will gradually increase to 65 for women between 2010 and 2020.

Some people also pay voluntary National Insurance contributions. For example, you might choose to pay them if you:

• aren't working and are not claiming state benefits
• haven't paid enough National Insurance contributions in a year to count for the State Pension or other long term state benefits
• live abroad and want to maintain your state benefits entitlement

This is payable if you earn more than £105 per week and is deducted from your wages by your employer.  You pay 11% of your earnings above this amout.  This amount is reduced to 1% on earnings above £770 per week.

If you are not working it is possible to make voluntary National Insurance contributions of £8.10 per week.   By doing this you protect your National Insurance record and ensure that you receive a full pension when you retire.

If you do not have a National Insurance number and need to apply for one then you can check our information sheet to find out how to get one.

Further information on all of the above is available at the HM Customs and Revenue tax website.  The Student Advisers have also produced an information sheet, or you can contact us if you need further information or assistance.

Please contact us to discuss how we can help you, for more information or to arrange a no obligation meeting.