National Insurance
IntermediateNational Insurance is a system of contributions in the United Kingdom, paid by employees, employers and the self-employed on earnings, which builds entitlement to certain state benefits, most importantly the State Pension.
National Insurance contributions are deducted from wages above a threshold, and employers pay their own contributions on top. Self-employed people pay contributions through their tax return. Contributions help fund the State Pension, some unemployment and sickness benefits and the National Health Service.
Each year in which a person pays or is credited with enough contributions counts as a qualifying year. Under current rules, people generally need 35 qualifying years to receive the full new State Pension and at least 10 years to receive any.
For example, someone who took time off work to care for young children may still receive credits for those years if they claimed Child Benefit, helping protect their State Pension.
People can check their National Insurance record online and may be able to pay voluntary contributions to fill gaps in their record. Each person has a unique National Insurance number, used to track their contributions and tax. Rates and thresholds are set by the government and change over time. Other countries have similar social insurance contributions, such as Social Security taxes in the United States.
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