Most people who work have
to pay contributions for National Insurance.
National Insurance contributions are related
to what you earn. That means that you pay a certain percentage
of your wage.
The contributions are paid to the National
Insurance fund and build up your entitlement to certain benefits.
There are six different classes of contributions
to the NI. Some classes count towards certain benefits - so you
need to know which class you should contribute to.
National Insurance contributions in general
cover Job Seeker's Allowance, Incapacity Benefit, Retirement Pensions,
Bereavement Benefits and Maternity Allowance.
How National Insurance is collected
If you are an employee, National Insurance is deducted from your wages before you receive your pay packet.
If you self-employed you can pay Class 2 National Insurance contributions either by monthly direct debit or quarterly bill. Class 4 contributions are calculated as part of your self-assessment return and you pay them along with your Income Tax. See Income Tax for our information on Self-Assessment.
More information on National Insurance can
be found on the HMRC web site.
Your National Insurance number Usually every citizen of the UK receives a National Insurance
number when they turn 16. You keep this number for a lifetime.
If for some reason you didn't receive the
number automatically you have to apply for one. You should contact
the nearest office of the Department for Work and Pensions to
arrange an appointment for an interview. In this interview you
have to prove your identity.
If you work you always need to have a National
Insurance Number. It is your account number for all dealings with the
HM Revenue & Customs and Department for Work and Pensions.
When you start working you should tell your employer
your National Insurance number right away. This is important because if your employer
allocates your contributions to the wrong account you might have problems
with claiming benefits later on.