What is National Insurance?

 

National Insurance is the government scheme that provides security for employees when they are sick, unemployed or retired. Your personal number is used to record the contributions that you make, tax paid and as a reference number for the whole social security system.

Each National Insurance number is unique and must only be used by the individual it is assigned to. It is made up of letters and numbers like this:

AA 12 34 56 Z (Example)

 

Who pays National Insurance?

 

Everyone who works has to make National Insurance Contributions (NIC). As an employee, you will pay National Insurance when you earn more than £139 per week. You still need a National Insurance Number even if you do not earn this amount.

The law requires the employer to deduct the employee's share from their pay. Your NIC are credited to your own National Insurance "account" and may entitle you to NIC related benefits in the future (after sufficient contributions have been made). These include incapacity benefit, the state pension and contribution-related Jobseekers Allowance.

 

Why do I need a National Insurance Number?

 

This number enables your NIC (and those made by your employer) to be credited to your personal account. Most people brought up in the UK are automatically given a National Insurance number when they reach the age of sixteen.

If you are not a British citizen and/or have never had a National Insurance number you can apply for one via Jobcentre Plus. You do not need a job to apply for this number so call them on 0845 600 0643 for an appointment as soon as possible. Take your passport as identification, a letter from your future employer confirming employment/the offer of a job and any immigration papers you might have. (Sometimes this process may be conducted over the telephone but you should be prepared for an interview.)

 

Can I work without a National Insurance number?

 

You can apply for vacancies without a National Insurance number and even start work without one but as soon as you receive an offer of a job, you should apply for a National Insurance number. As soon as you receive it, you must inform your employer. (It can take a month to receive your National Insurance number but it is okay to work during this time.)

 

How much National Insurance do I pay?

 

If you're employed, you pay Class 1 National Insurance contributions. The first £139 earned each week is free from NIIC. You do not have to make any contribution, if you earn less than £139 each week. After this, you have to pay 12% on each additional £1 of weekly income. The upper earnings limit for paying NIC is £817 per week; 2% NIC is paid on earnings over this amount.

NIC example:

If you earn £189 per week, you would pay 0% of £139 + 12% of £50 = £6 per week

 

How do I apply for a NI number?

 

You need to contact the Jobcentre Plus National Insurance Number Allocation Service on 0845 600 0643.

Further information can be found at:

www.dwp.gov.uk www.jobcentreplus.gov.uk www.hmrc.gov.uk www.direct.gov.uk

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The information on this website is intended as a general guide, not an authoritative statement of the law.

 

Useful Contacts

 

Department for Work & Pensions website:

www.dwp.gov.uk

 

HM Revenue & Customs website:

www.hmrc.gov.uk

 

Inland Revenue website:

www.inlandrevenue.gov.uk/students

 

Student Tax Advice

www.direct.gov.uk/studenttaxadvice