National Insurance: What am I paying for?

National Insurance: What am I paying for?
National Insurance (NI) in the United Kingdom is a system of contributions paid by workers and employers to qualify for certain benefits. The national insurance scheme is administered by HM Revenue and Customs (HMRC).
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.


National Insurance Contributions classes and rates


NI ClassWho paysHow to payNI rate 2018-2019
Class 1EmployeeThrought payroll12 % (pays than earning £702 to £3,865 a month)
Class 1EmployerThrought payroll13.8 % (pays than employees earning £702 to £3,865 a month)
Class 2Self-employedThrought Self Assessment£2.95 a week (pays than earning more than ££6,205 a year
Class 3Voluntary contributionsWrite HMRC£14.65 a week
Class 4Self-employedThrought Self Assessment9 % (than earning profit £8,424 to £46,350)


What National Insurance is for


BenefitsClass 1: employeesClass 2: self-employedClass 3: voluntary contribution
Basic State PensionYesYesYes
Additional State PensionYesNoNo
New State PensionYesYesYes
Contribution-based Jobseeker's AllowanceYesNoNo
Contribution-based Employment and Support AllowanceYesNoNo
Matenity AllowanceYesNoNo
Bereavement BenefitsYesYesYes


Class 4 contributions paid by self-employed people don’t usually count towards state benefits.


You can find more information about Nationa Insurance on the GOV.UK


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About Diana Hurta

Founder / CEO at DH Accounts & Legal Ltd.

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