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National insurance – contributions and benefits

National insurance

National insurance is a scheme where people in work make payments towards benefits. The payments are called national insurance contributions and certain benefits are only payable if you meet the national insurance contribution conditions. The national insurance scheme is administered by HM Revenue and Customs (HMRC).

If you claim a benefit or tax credit, you will need a national insurance number. This applies even if it is not a benefit which depends on national insurance contributions. You will also need to supply your national insurance number in other circumstances, for example, when you start a new job.

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National insurance numbers

A national insurance number (NINO) is a number unique to you which is used to keep track of your national insurance contributions and the benefits which you are paid. The number is made up of two letters, six numbers and one letter, for example, AB 123456 C. You must not let anyone else use your number.

If you are a young person under 16 living in the UK, and your parent is entitled to Child Benefit for you, you will automatically be registered for national insurance and a number will be sent to you just before your 16th birthday. If you didn't get a number when you should have done, and you're under 20, you can contact the National Insurance Registrations Helpline on 0300 200 3502 (textphone 0300 200 3519) for advice. If your parent is claiming Child Benefit for you, even if they have chosen not to receive it in order to avoid the High Income Child Benefit tax charge, you should still get a national insurance number. For more information on High Income Child Benefit tax charge, see Child Benefit and tax if you have a high income.

You don't have a legal right to a national insurance number, but you are legally obliged to apply for one if you start work, or if you (or your partner) claim benefit.

Identifying your national insurance number

If you think you have a national insurance number, but you are not sure what it is, you may find it on documents like:

  • pay slips
  • end of year statements of the tax and national insurance which has been deducted from your pay (P60 form)
  • benefit decision letters.

You need to supply your national insurance number when you claim a benefit, tax credit or start a job. If you don't know it, you should provide information such as your name, addresses you have lived at, addresses of your employers and any other information which will help to identify who you are. This will help the benefit or tax credit office to find your number, or to start the process of getting a number if you don't have one.

You can get help in finding your number from HM Revenue and Customs National Insurance Registrations Helpline on 0300 200 3502 (textphone: 0300 200 3519).

Reporting changes

You should inform the HMRC National Insurance Contributions Office if you:

  • move
  • change your name
  • get married or register a civil partnership
  • get divorced or dissolve a civil partnership
  • your husband, wife or civil partner dies.

This will help HMRC to keep your national insurance contribution record up-to-date and to get in touch with you if they need to. It also means they can contact you about claiming state retirement pension just before you reach state retirement age.

You can report a change of name or address by using the HMRC email service at: www.hmrc.gov.uk, or you can phone the National Insurance Helpline for employees on 0300 200 3500, or for the self-employed on 0300 200 3505.

Applying for a national insurance number

If you don't have a national insurance number and you are working or about to start work, telephone the Jobcentre Plus National Insurance number application line on 0345 600 0643 (textphone: 0845 600 0644) to start your application.

If you don't have a national insurance number and you make a claim for benefit or tax credits, the office dealing with your benefit or tax credits claim will start the application for a national insurance number. You must provide them with enough information to do so.

Whichever way you apply, Jobcentre Plus will contact you and may ask you to come to an interview to confirm your identity. They will tell you what documents you need to bring. You can find examples of acceptable documents on the GOV.UK website at www.gov.uk, or a much more detailed list in guidance for DWP staff at www.gov.uk. The documents must be originals, not photocopies. You will be asked questions about where you have lived and what jobs you have done.

You will not be issued with a number until the office is satisfied that you have proved your identity. Some people may have problems because they do not have the documents usually accepted as evidence. You should not be refused a number just because you do not have any documents. You may be able to give details of other people who can confirm facts about you, for example, a solicitor or a community group.

If you're applying because you're starting work, you will also be expected to provide evidence to prove you have a right to work in the UK. If you don't have the right to work in the UK, you won't be entitled to a national insurance number.

If you have problems applying for a national insurance number, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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When do you have to pay national insurance contributions

Living and working in the UK

You usually only have to pay national insurance contributions if you are employed or self-employed in Great Britain or Northern Ireland, and you live here. However, there are situations in which you have to, or can choose to, pay national insurance contributions while you are working abroad.

I am a migrant worker from Portugal and work here on temporary contracts. Do I have to pay national insurance contributions in this country?

If you are from Portugal, you don't need to pay national insurance contributions, provided you hold a current certificate from your home country confirming you're paying national insurance there. This is because Portugal is one of the European Economic Area (EEA) countries. Countries in the EEA are European Union countries and Liechtenstein, Iceland and Norway.

To find out which countries are in the European Union, go to The European Union.

If you are working abroad or you have an overseas employer or you are from an EEA country, and you are not sure whether you should be paying national insurance contributions, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Under pension age

You have to pay national insurance contributions while you are working and under pension age, if you earn more than a certain amount called the primary threshold. You do not pay them if you are under 16, and you stop paying them when you reach state pension age. If you are self-employed, you may have to pay some Class 4 contributions after state pension age, depending on your earnings.

You may be able to carry on getting national insurance credits if you are a man who:

  • isn't working
  • is under 65, but
  • has reached or is over the state pension age of a woman who has the same date of birth as you.

For more information about state pension age, see Benefits for older people.

If you are an employee and under pension age

If you are an employee under pension age, you have to pay Class 1 national insurance contributions on part of your earnings. The amount you pay depends on how much you earn. You might not have to pay any contributions if your earnings are lower than a certain amount called the primary threshold.

The primary threshold changes every year in April.

If you have more than one job with different employers, you must pay national insurance contributions on each employment where your earnings are above a certain limit. If you have more than one low-paid job, you may not have to pay national insurance contributions at all. This is because the earnings from each job will be treated separately and, if they are each below the limit, you will not have to pay any national insurance.

If you want to check the earnings limits, you can look on the GOV.UK website at www.gov.uk.

If you are self-employed and under pension age

If you are self-employed, you have to pay national insurance contributions unless your earnings are very small and you have applied for a certificate which exempts you from paying national insurance (see under Class 2 contributions).

Your national insurance contribution record

Your contribution record is used to decide whether you are entitled to contribution-based benefits, if you claim them. In particular, it is used to decide how much State Pension you get when you reach state pension age. Your contribution record is identified by your national insurance number (NINO).

For more information about state pension age, see Benefits for older people.

Paying late contributions

If you did not pay contributions when you were liable to do so, you can be required to pay them later, and may also face a penalty or prosecution. If you were an employee, it is your employer’s responsibility to deduct contributions and pay them to HMRC, but if you were involved with your employer in avoiding payment, you can be prosecuted.

Late contributions can still count towards contribution-based benefits if they are paid within certain time limits.

If you have gaps in your contribution record, for example, because you were studying, you might decide to pay voluntary contributions (see also under Class 3 contributions). You will need to consider whether the contributions will help you qualify for any benefits. You should bear in mind that the number of years you need to have paid or been credited with contributions in order to qualify for the full State Pension is:

  • 30 years if you reach State Pension age on or after 6 April 2010 but before 6 April 2016, or
  • 35 years if you reach State Pension age on or after 6 April 2016.

To find out more about whether you need to pay voluntary contributions, see the GOV.UK website at www.gov.uk.

Classes of national insurance contributions

There are six different classes of national insurance contributions, but two of them are only paid by employers. The class you pay depends on whether you are an employee, self-employed or you are paying contributions voluntarily to make up gaps in your contribution record. There are also contributions which employers have to make in respect of each employee.

Class 1 contributions

You have to pay Class 1 national insurance contributions if:

  • you are an employee under state pension age, and
  • you earn more than a certain amount each week. This is known as the primary threshold.

For more information about state pension age, see Benefits for older people. For the amount of the primary threshold, go to the GOV.UK website at www.gov.uk.

Your employer also pays Class 1 contributions for each employee. Your employer deducts Class 1 contributions from your wages. Each time you are paid, your employer should give you an itemised pay statement showing the deductions which they have made from your wages. Your employer must make these deductions and pay them to HM Revenue and Customs together with:

  • the contributions they have to make on your behalf
  • your income tax.

It is against the law if your employer does not do this.

Once you reach state pension age, show your employer proof of your age, such as a birth certificate or passport, so that they stop deducting contributions. However, your employer will still have to pay employer’s contributions in respect of you while you are working.

Class 1 national insurance contributions are a percentage of your wages over the primary threshold. Different percentages apply depending on how much you earn.

If you earn less than the primary threshold , you do not pay any national insurance. You will have national insurance contributions added to your record as long as you earn at least as much as the lower earnings limit.

The level of Class 1 contributions you pay as an employee depends on whether you are contributing to additional State Pension (contracted-in), or contributing to an employer's scheme which is contracted out of additional State Pension. If you are in a personal pension scheme, you pay contracted-in contributions, but HMRC will also pay into your pension scheme.

If you want to check the lower earnings limit, the primary threshold, the upper earnings limit and the percentage of your wages that is deducted for national insurance, you can look at the GOV.UK website www.gov.uk or you can consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Class 1A contributions

Class 1A contributions are paid by your employer if you get certain benefits with your job - for example, a company car. Class 1A contributions only have to be paid if you are a company director or the benefits you get with your job are worth more than a certain amount each year.

Class 1B contributions

Class 1B contributions are paid by your employer if they have to enter into PAYE settlement agreements with HMRC for the payment of tax.

Class 2 contributions

You pay Class 2 contributions if you are self-employed. If your earnings are below a certain limit (called the small earnings exception limit), you do not have to pay contributions, but you must apply to the HMRC in order to qualify for the exception. You can choose to pay NI contributions voluntarily even if your earnings are below the limit, so that your contribution record does not have gaps in it. Depending on the level of your profits, you may also have to pay Class 4 contributions (see under Class 4 contributions).

If you want to check the rate of Class 2 national insurance contributions or the small earnings exception limit, you can look on the GOV.UK website at www.gov.uk. You must contact HMRC if you become self-employed so that you can set up payment of Class 2 contributions. You should contact HMRC within three months of becoming self-employed. You usually pay contributions by direct debit every month, or through a bank or post office. If you are liable to pay them and do not do so, HMRC can take legal action to recover unpaid contributions.

Reduced contributions for married women and widows

Some married women and widows have the right to pay reduced contributions. You will only have this right if you applied on an official form before 21 May 1977. No one can take up this right now.

If you chose to pay reduced contributions, you pay a lower rate of Class 1 national insurance and, if you're self-employed, you don't have to pay Class 2 contributions. However, it means you can't get contributory benefits and you may get less state Retirement Pension when you retire.

You can choose to start paying contributions at the standard rate by getting in touch with HMRC National Insurance Contributions Office. Some women on low earnings who give up the reduced rate can be treated as paying full rate contributions without paying anything. You will need to fill in a form if you decide to give up your right to reduced contributions.

Further information about the effect of paying reduced rate contributions and deciding whether to pay the full rate is on the GOV.UK website at www.gov.uk.

Class 3 (voluntary) contribution

Class 3 national insurance contributions are voluntary contributions which you can choose to pay if you do not have to pay any compulsory contributions - for example, if your earnings are low. Credits for parents and carers are also Class 3 contributions. You can choose to pay Class 3 contributions to help fill gaps in your national insurance contribution record. HMRC may get in touch with you to suggest you do this, but if you think there may be gaps in your record, you can also get in touch with them. It is particularly important if you think it is going to affect the amount of your state Retirement Pension.

You should bear in mind that the number of years you need to have paid or been credited with contributions in order to qualify for a full State Pension is:

  • 30 years if you reach State Pension age on or after 6 April 2010 but before 6 April 2016, or
  • 35 years if you reach State Pension age on or after 6 April 2016.

Further information about rates of voluntary contributions, and when and how to pay, is available on the GOV.UK website at www.gov.uk.

Class 4 contributions

You may have to pay Class 4 contributions if you are self-employed and your profits are over a certain amount each year. You normally pay these with income tax.

If you want to check the rate of Class 4 contributions and the level of profit on which you have to pay them, you can look at the GOV.UK website at www.gov.uk.

What happens when you are not paying contributions

For most people, there will be periods of their working life when they are not paying contributions because they are not working. Without help this would mean you would have gaps in your national insurance record and this could prevent you getting benefits. In particular, it could affect your State Pension. The national insurance scheme recognises many of these situations and allows you to qualify for credits including credits for parents and carers if you are looking after a child or disabled person.

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National insurance credits

National insurance credits are Class 1 contributions which you do not pay for, except for credits for parents and carers which are Class 3 credits. Credits are added to your contribution record when you are unemployed or have limited capability for work, and in some other situations where you are not working for particular reasons. They will not normally be paid automatically unless HMRC know about your circumstances - for example, because you are claiming Jobseeker's Allowance (JSA) or Employment and Support Allowance (ESA). For some types of credits, you have to apply in writing.

You may be entitled to credits for when you are on an approved training course. You can get credits for weeks doing jury service, weeks in which you get Carer’s Allowance, weeks when you received bereavement benefits (which have now ceased), and for weeks in which you get Statutory Maternity Pay or Statutory Adoption Pay. From 5 April 2012, you can get credits for weeks in which you get Additional Statutory Paternity Pay.

If you are a man, you will get NI credits if:

  • you're aged under 65, and
  • you've reached or are over the state pension age of a woman with the same date of birth as you, and
  • you're not paying contributions on earnings because, for example, you have taken early retirement.

National insurance credits will not help you to qualify for all benefits.

For more information about state pension age, see Benefits for older people.

Further information about when you can get national insurance credits and when you have to apply for them is on the GOV.UK website at www.gov.uk.

Credits for parents and carers

Credits for parents and carers helps parents and carers to satisfy the conditions for long-term benefits, for example, State Pension. This helps you if you are not working because you are bringing up a child or caring for someone.

Credits for parents and carers replaces home responsibilities protection. If you reach state pension age on or after 6 April 2010, any home responsibilities protection you have already received will be changed into credits for parents and carers.

You get credits for parents and carers automatically if you are receiving Child Benefit for a child under 12 or you are getting Carer's Allowance.

However, if you care for one or more people for 20 hours or more a week but are not getting Carer's Allowance, you will need to make a claim for the credits.

Sometimes, you may be able to get credits for parents and carers if your partner gets Child Benefit instead of you. In this case, you would need to claim credits for parents and carers, it would not be recorded automatically.

For more information about Carer's Allowance, see Benefits for people who are sick or disabled.

I can't work because I have to look after my 14 year old son who's disabled. Will I still get a full pension when I reach state pension age?

The contribution requirements for State Pension are complicated and depend on a number of things. If you haven't got enough contributions yourself, you might be able to use your husband's contributions. Also, if you get Carer's Allowance, you'll automatically get credits for your national insurance contributions to allow you the full amount of pension. If you don't get Carer's Allowance and you look after your son for at least 20 hours or more a week, you can apply to HMRC to make sure you get credits for parents and carers to help you towards meeting the requirements for the full amount of pension.

The way in which credits for parents and carers helps you get benefits is complicated. If you think you should get credits for parents and carers, or you want to apply for them, you can consult an adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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Which contributions pay for which benefits

Class 1

Class 1 national insurance contributions count towards contribution-based Jobseeker’s Allowance, Incapacity Benefit, contributory Employment and Support Allowance, Bereavement Benefits, State Retirement Pension and Maternity Allowance.

Class 2

Class 2 contributions count towards the same benefits as Class 1, except that Class 2 will not usually count towards contribution-based Jobseeker’s Allowance.

Class 3

Class 3 count towards bereavement benefits and State Pension.

Class 4

Class 4 contributions do not count towards any benefits. However, you still have to pay these if you are self-employed and have profits over a certain level (see under Class 4 contributions).

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State Pension and national insurance contributions

The amount of State Pension you get is based on your national insurance contributions record over your working life from age 16 until State Pension age. This record is made up from national insurance contributions paid and/or credited to you in each tax year. The tax year runs from 6 April one year to 5 April the following year. A minimum amount of contributions and/or credits is required to make each tax year count as a 'qualifying year' towards your overall contributions record.

How many qualifying years do you need to get the full State Pension?

The number of qualifying years you need to get a full state pension depends on when you reach your State Pension age.

If you reached State Pension age before 6 April 2010, you normally needed 44 qualifying years if you are a man, or 39 qualifying years if you are woman.

If you reach State Pension age on or after 6 April 2010 but before 6 April 2016, you need 30 qualifying years.

If you reach State Pension age on or after 6 April 2016, you normally need 35 qualifying years.

Using someone else's contribution record

In some circumstances, you may be able to use your husband's, wife's or civil partner's contribution record to help you qualify for a State Pension.

Reduced pension if you don't have enough contributions

If you don’t have contributions or credits for enough years to get a full State Pension, you may be able to get one at a reduced rate.

For more information about State Pension and State Pension age, see Benefits for older people.

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Contribution-based Jobseeker’s Allowance and national insurance contributions

Whether you are entitled to contribution-based Jobseeker's Allowance (JSA), depends on the National Insurance contributions you have paid over the last two complete tax years before the benefit year you make your claim in.

A benefit year starts in January (on the first Sunday of that month) and ends a year later.

For more information about contribution-based Jobseeker’s Allowance, see Benefits for people looking for work.

If you want advice on whether you meet the contribution conditions for Jobseeker’s Allowance, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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Contributory Employment and Support Allowance and national insurance contributions

The first contribution condition for contributory Employment and Support Allowance (ESA) is that you must have actually paid enough Class 1 or 2 national insurance contributions in at least one of the last two complete tax years before the year in which you claim. However, you may be able to satisfy this condition with contributions paid in any tax year in some circumstances - for example, because you were getting Carer’s Allowance or Incapacity Benefit, or if you were getting Working Tax Credit with a disability element before you became incapable of work.

The second condition is that you must either have paid or been credited with enough contributions for the last two complete tax years before the year you claim. However, credited contributions will not always count towards this condition.

The contribution conditions for ESA, and when they can be relaxed because of your circumstances, are complicated, so you may want to get advice. If you do not meet the contribution conditions for contributory ESA, you may still qualify for income-related ESA if your income and capital are low enough.

For more information about ESA, see Benefits for people who are sick or disabled.

If you are not sure about whether you meet the contribution conditions for contributory ESA, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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Widowed Parent’s Allowance, Bereavement Allowance and national insurance contributions

The first contribution condition for Widowed Parent’s Allowance and Bereavement Allowance is that your husband, wife or civil partner must have actually paid enough Class 1, 2 or 3 contributions in any one tax year before they died. You do not have to satisfy this condition if they were getting long-term Incapacity Benefit or Employment and Support Allowance in the year they died.

The second contribution condition is that your late husband, wife or civil partner must either have paid or been credited with contributions for most of their working life - this is most of the years between 16 and their death.

If your husband, wife or civil partner did not have contributions or credits for the right number of years, you can get a reduced rate of Widowed Parent’s Allowance or Bereavement Allowance, as long as they had contributions or credits for at least 25 per cent of the necessary years.

For more information about Widowed Parent’s Allowance and Bereavement Allowance, see Benefits and bereavement.

If you are not sure whether you meet the contribution conditions for Widowed Parent’s Allowance or Bereavement Allowance, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Bereavement Payment

There is only one contribution condition for a Bereavement Payment. Your husband, wife or civil partner who has died must have actually paid, in any one tax year, Class 1, 2 or 3 contributions. Contributions paid in different years can be added up in certain circumstances - for example, if your husband, wife or civil partner had only just become liable to pay contributions when they died.

For more information about Bereavement Payments, see Benefits and bereavement.

If you are not sure whether you meet the contribution conditions for bereavement payment, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

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Problems with national insurance

If you want to check your national insurance contribution record, you can do this online on the GOV.UK website at www.gov.uk.

Most decisions about national insurance contributions are made by HMRC. If you disagree with their decision, you can appeal against it. Write to them within 30 days of the decision. A fact sheet about the appeals process is on the HMRC website at www.hmrc.gov.uk.

If you think that a decision about national insurance credited contributions is wrong, you can ask the Department for Work and Pensions (DWP) to revise it. Write to them within one month of the decision. You can also appeal against the decision, but you will have to ask them to reconsider the decision first.

If you are unhappy with the service you have received from HM Revenue and Customs (NI contributions) office, you can complain. For example, you may feel they have made mistakes or taken too long to deal with your enquiry. You should first contact the office which is dealing with your case.

Discrimination

It's against the law for you to be treated unfairly because of age, disability, gender reassignment, pregnancy or childbirth, race, religion, sex or sexual orientation when benefits or tax credits are paid to you. Also, the Department for Work and Pensions, HM Revenue and Customs and most local authorities have policies which say they will not discriminate against you because of other things, for example, if you have caring responsibilities. If you feel that you've been discriminated against when you are paid benefits or tax credits, you can make a complaint about this.

For more about discrimination, see our Discrimination pages.

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Further help and information

You can get further help and information about national insurance from HM Revenue and Customs National Insurance Helpline, tel 0300 200 3500 (Textphone 0300 200 3519).

If you need information in different formats or have other special needs, you can find information about services provided by HMRC on their website at: www.hmrc.gov.uk/contactus/particular-needs.htm.

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