National Insurance contributions are made by everyone in the UK, and allow you to qualify for other benefits such as the State Pension. You pay National Insurance contributions automatically if you are over 16, an employee making £155 a week, or are self-employed and earning more than £5965 in profits each year.
Before you can make any National Insurance contributions, you need to have a National Insurance number. You can find your personal number on your payslip, p60, or letters about tax sent to your address. There are seven different types of National Insurance, and you are placed into the relevant band based on your job and income. Class 1 is for employees earning more than £155 a week, and their National Insurance contributions are automatically taken away from their paycheck each month. Class 2 is for those who are self-employed , and their National Insurance contributions are paid through their self-assessment forms, which must be filled out manually each year. To find out which National Insurance band you fall into, contact the National Insurance Helpline, who can help you with any query you have regarding your National Insurance contributions.
The amount of National Insurance you pay can be between 2 and 12%, and you must inform HMRC if you change your address and or start/stop being self-employed. To check which National Insurance band you fall under, we advise ringing the National Insurance Helpline. For this, you will need some personal information such as your name, date of birth, address, and NI number. If you wish to check your National Insurance payment record, you can do so on the government website. Again, you will need to have some personal information ready in case you are asked for it. If you wish to check if you qualify for the State Pension, or if you wish to find out how much you could receive on the State Pension, you can also do this online. However, you will need a log in to do this. You can create a login by following the instructions on your screen.
Recent figures show that almost 80% of UK residents do not know how many years you must pay National Insurance contributions in order to receive the full State Pension amount when you reach State Pension age. This shocking new statistic also found that 57% of citizens estimate they only have to pay 10 years less than the minimum amount of years. It was also found that 33% of UK citizens did not know that taking long periods of time off of work, for example for maternity leave or sick leave, resulted in not being awarded the full State Pension amount. With 55% of the population critically needing to take this time off, more people need to be made aware of exactly what impacts their State Pension.
You must have made 35 years of contributions with you National Insurance in order to qualify for a new state pension, which is five years more than previous years. Those who have made lower than 10 years worth of contributions towards National Insurance may receive nothing at all in terms of a State Pension. Many have called for an update by the government on the rules regarding National Insurance contributions, and for the legislation to made easily and readily available. If you wish to check your current National Insurance contributions, you need a log in with the HMRC, you also need personal information on yourself to get the information. Surely there should be a service whereby you can check up on all of the information regarding your National Insurance, what it contributes to, and exactly what you will receive when you start receiving your State Pension with the government.
It’s thought a change in legislation, and the ability for it to be more accessible by the UK public, will enable more and more people to engage with their monthly payments and review their pension options. Many people rely on the state pension. However, if they have only been contributing for less than 10 years, they will see nothing from the government whatsoever.
Many have called for the UK public to check their National Insurance contributions, and start a private pension pot or fund. This way, you will you have a back up in terms of money to live on if the state pension somehow falls short when you reach state pension age. Many young people are avoiding the issue of their pension in favor of spending their money for short term gain. This tactic is believed to send the economy on a downward spiral in future years. Young people are now being urged to keep an eye on their finances and plan for the future, as it may be starting to look bleak very soon.
If you would like to check your up to date contributions, you can do so on the government website, or by ringing the National Insurance Helpline. You can also fill out a structured email with the HMRC, who aim to be in touch with all applicants within two weeks.