December 6, 2023

What is National Insurance

National Insurance is a government-backed system that pays out benefits to people who meet certain criteria. It is funded by employer and employee contributions, as well as voluntary payments.

National Insurance has offices and agents all over India and Nepal. It also offers a variety of general insurance products.

About National Insurance

National Insurance is a system in the UK that combines contributions from employers and employees with state benefits. Most people pay it through their wages in the PAYE (pay-as-you-earn) system or via Self Assessment if they are self-employed. It is collected by HM Revenue and Customs (HMRC) along with Income Tax and repayments of Student Loans.

There are a number of different benefits that can be claimed, including State Pensions, Jobseekers’ Allowance and Maternity and Paternity Pay. Typically, you will need 35 years of paid NI contributions or credits to qualify for the full State Pension. You can also make voluntary contributions if you would like to top-up your record and cover gaps in your contribution history.

People pay different kinds, or classes, of NIC depending on how much they earn and the type of work that they do. Employees pay class 1 NI, which is worked out on a payment-by-payment basis, or it can be worked out annually for company directors based on their salary for the whole tax year. Self-employed people pay class 2 and class 4 NIC, which is calculated as a flat weekly rate or a percentage of their profits.

Get a NIC number

The NIC number is a unique identifier that is given to virtually every person in the UK who works, looks for work or receives benefits. It consists of two letters, six numbers and a final letter. The NIC number is not a proof of identity so it should not be used in place of one.

You can apply online to get your NIC number. You will need to provide some documents as evidence that you are who you say you are. You may be asked to attend an appointment or post photocopies of some documents. If you are new to the UK or need a NIC number to start work you should apply as soon as possible.

You can view your National Insurance record online through your personal tax account. To check your record you will need a Government Gateway user ID and password. The service is free and available in English and Welsh (Cymru). You can also request a statement of your National Insurance contribution history. When you request a statement you will need to tell us which years you want a statement for.

Pay your NIC contributions

There are different ways you can pay your NICs, depending on the type of income you receive. For example, employed people paid through PAYE have their contributions deducted automatically from their wages every week or month. Self-employed people pay Class 2 NIC on a portion of their profits and can also make voluntary payments called Class 3 contributions to fill gaps in their National Insurance record.

You can find out more about the different types of NICs and how they are calculated on HMRC’s website. This includes details of the current NI rates and thresholds, which are used to calculate employee NIC deductions by employers. You can also use this NIC calculator to help you work out how much your NICs should be.

If you are self-employed, it’s worth considering making voluntary NIC payments to top up your National Insurance record and make sure you have enough qualifying years for the State Pension when you retire. You can do this online or by submitting a paper tax return. You can get advice about your options from the Advice NI service or a financial adviser, who will charge for their services.

Claim a benefit

There is a range of government support for different situations, including if you are sick or disabled, have children, are a carer or need help with council tax and heating costs. The support is handled by different departments, so it is important to make your claim in the right place. Find out how to do this by searching for the relevant article on our benefits page.

If you are a pensioner or nearing State Pension age, you can check your National Insurance record online by signing into your personal tax account using your Government Gateway user ID and password. If you are not yet a pensioner, you can contact the Isle of Man National Insurance office by email or telephone to ask for a statement of your NIC contributions.

You can also use our Benefits Calculators to see what you might be eligible for. If you have a specific problem, you should contact your nearest Jobs and Benefits office for advice. This will ensure that you get the correct information and your application goes through smoothly.

Find your NIC number

The NI number is unique to every UK citizen, does not change during their lifetime and can be used for many purposes. It consists of two prefix letters, six digits and one suffix letter. It is often used as an account number with a bank or credit union, but it is not proof of identity.

If someone steals your NIC number they are committing fraud and HMRC will take it seriously. If you think that your NIC number has been stolen you can contact HMRC’s fraud hotline and they will investigate.

Everyone in the UK needs a National Insurance number, including people who are not working. NICs provide the foundation for most of the UK’s social security payments, such as the state pension in retirement and maternity allowance, and contribute to the wider public finances through taxation and employer contributions. They are the UK’s second largest source of revenue after income tax. The majority of NICs are paid by employees and employers through the Pay As You Earn system, with self-employed people paying a lower rate.  אתר ביטוח לאומי

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