Building up your entitlement
You pay National Insurance contributions (NICs) to build up your entitlement to certain social security benefits, including the State Pension. The type and level of NIC you pay depends on how much you earn and whether you're employed or self employed. You stop paying NICs when you reach State Pension age.
You pay NICs if you are an employee or self-employed and you are aged 16 and over, providing your earnings are more than a certain level. You stop paying NICs at State Retirement age. This is currently 65 for men and 60 for women but will gradually increase to 65 for women over the period 2010 to 2020.
Your National Insurance number (NI number) is your own personal account number. The number ensures that the National Insurance contributions and the tax you pay are properly recorded on your account. It also acts as a reference number for the whole social security system.
The only people you should ever give your NI number to are:
Jobcentre Plus, if you claim Jobseeker's Allowance
You will also be required to provide your NI number if you open an Individual Savings Account (ISA).
If you don't already have a NI number you must apply for one:
To be able to apply you must be:
If you are a parent or guardian and receiving Child Benefit, any children you care for will automatically get a card showing their NI number just before they reach the age of 16.
National Insurance Rates
The following amounts apply for the 2008/09 tax year:
If you're employed
if you earn above £105 a week (the 'earnings threshold') and up to £770 per week you pay 11 per cent of this amount as 'Class 1' NICs
If you're self-employed
you pay 'Class 2' NICs at a flat rate weekly amount of £2.30
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