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National Insurance

National Insurance (NI) is a UK tax you pay on earnings if you are working or self-employed. It helps fund the State Pension and some benefits. It is separate from Income Tax, but usually taken from your pay at the same time.

This guide explains, in simple language, how National Insurance works in the UK right now. It covers employees, the self-employed, people with low earnings, students, people nearing pension age, and those with gaps in their record.

It is written for the 2025/26 tax year (6 April 2025 to 5 April 2026), but also explains important recent changes from earlier years.

What National Insurance is

National Insurance is a set of contributions paid by:

  • Employees
  • Employers
  • Self-employed people
  • Some people who choose to pay voluntarily

These contributions build up your “National Insurance record”. Your record is a list of tax years where you:

  • Paid National Insurance, or
  • Were given National Insurance credits, or
  • Paid voluntary contributions.

Having enough “qualifying years” on your record is vital for getting the full new State Pension and some other benefits.

You can read the official overview on GOV.UK here: National Insurance: introduction.

What National Insurance pays for

National Insurance contributions help pay for:

  • The State Pension
  • Some unemployment benefits
  • Certain sickness and disability benefits
  • Maternity and some parental benefits
  • Bereavement benefits

National Insurance is not a personal savings pot. Your contributions do not sit in an account with your name on it. Instead, they go into a big pot used to pay people who are currently claiming benefits, including pensioners.

National Insurance vs Income Tax

National Insurance and Income Tax are different, even though both are taken from your pay.

  • Income Tax is based on your total income for the year.
  • National Insurance is mainly based on your weekly or monthly earnings from work or self-employment.
  • You usually pay Income Tax for life if your income is high enough.
  • National Insurance usually stops once you reach State Pension age.

On your payslip, you will usually see Income Tax as “TAX” and National Insurance as “NI” or “NIC”.

Who has to pay National Insurance?

Most people working in the UK will pay National Insurance at some point. You normally pay NI if:

  • You are aged 16 or over, and
  • You are below State Pension age, and
  • You earn above certain thresholds from work or self-employment.

Employees

You usually pay Class 1 National Insurance if you are employed and your weekly earnings from that job are above the primary threshold.

For 2025/26, the main figures to remember are:

  • The weekly earnings threshold where you start paying NI stays linked to the basic tax-free allowance (equivalent to £12,570 a year, or £242 a week).
  • You pay a main rate of NI on earnings between the threshold and the upper limit.
  • You pay a smaller rate on earnings above the upper limit.

The exact thresholds can change, so always check the current rates on GOV.UK: National Insurance rates and categories.

The self-employed

If you are self-employed, you are normally liable for:

  • Class 4 National Insurance on your profits (above a set level), paid through Self Assessment
  • Class 2 contributions have been effectively removed for most UK-based self-employed people from April 2024, but there are still important rules, especially if you work abroad or have low profits.

We explain self-employed NI in detail in section 6.

People with low earnings

If your earnings are low, you may not have to pay National Insurance, but you might still build qualifying years for your record. This can happen if you earn between a lower minimum (the “Lower Earnings Limit”) and the main threshold. In those cases:

  • You do not pay NI from your pay, but
  • The year can still count towards your State Pension.

This is important for people on part-time hours or zero-hours contracts.

When you stop paying

You normally stop paying employee NI when you reach State Pension age. Your employer should automatically stop NI deductions from your pay once you reach that age. You may still pay Income Tax on your earnings if they are high enough.

Self-employed NI (Class 4) also stops from the tax year after you reach State Pension age.

Your National Insurance number

Your National Insurance number (NINO) is a unique code that links your NI contributions and tax records to you. It usually looks like this: QQ 12 34 56 A.

Why your NI number matters

Your NI number is used to:

  • Keep track of your NI contributions and credits
  • Make sure you get the right State Pension and benefits
  • Identify your tax records with HMRC and DWP

Finding or applying for your NI number

You may find your National Insurance number on:

  • Your payslip or P60
  • A letter from HMRC or the Department for Work and Pensions
  • Your personal tax account online

If you need to find or apply for an NI number, use the official GOV.UK services:

Do not share your NI number widely. Treat it as sensitive personal information.

National Insurance classes explained

Different “classes” of National Insurance apply to different types of work.

  • Class 1  – Paid by employees through PAYE (and by employers on top).
  • Class 1A and 1B – Paid only by employers on certain benefits and expenses.
  • Class 2 – Historically paid by self-employed people at a flat weekly rate; from April 2024 most UK-based self-employed no longer pay this, but it still exists in limited situations.
  • Class 3 – Voluntary contributions to fill gaps in your NI record.
  • Class 4 – Paid by self-employed people on their taxable profits.

This guide focuses on the classes that affect most people directly:

  • Class 1 (employees)
  • Class 4 and the new Class 2 arrangements (self-employed)
  • Class 3 (voluntary contributions)

Class 1 National Insurance for employees

If you are employed, you will normally pay Class 1 NI. Your employer also pays Class 1 NI on your earnings, but that part does not appear on your payslip.

How Class 1 NI works in practice

Class 1 NI is:

  • Calculated on your earnings in each pay period (weekly or monthly)
  • Deducted from your wages by your employer
  • Sent to HMRC along with Income Tax through PAYE

For most employees in 2025/26:

  • You start paying NI when your weekly pay goes above around £242 (equivalent to £12,570 per year).
  • You pay a main percentage on earnings between that threshold and an upper limit.
  • You pay a lower percentage on earnings above the upper limit.

The exact figures can change with each tax year, so always check the latest information at National Insurance rates and categories.

Example: employee earning £30,000 a year

Let us walk through a simple, rough example. Assume the main rate of employee NI is 8% between the main threshold and upper limit.

If you earn £30,000 a year (about £577 a week):

  1. The first part of your weekly pay up to the threshold (around £242) – no NI is paid on that portion.
  2. The rest of your weekly pay between £242 and your actual weekly pay is charged at the main NI rate.
  3. You do not reach the upper limit, so there is no earnings at the 2% rate in this example.

The exact weekly NI amount will depend on the precise thresholds and rates for that tax year, but this shows the method.

Multiple jobs and Class 1 NI

If you have more than one job:

  • Each employer calculates NI separately on what they pay you.
  • You might end up paying more NI than needed if your total earnings are high.
  • You may be able to claim a refund if too much NI has been paid.

To learn how to request a refund, see GOV.UK: Claim a National Insurance refund.

Students and Class 1 NI

If you are a student with a part-time job, you are treated like any other employee. You will pay NI if you earn above the thresholds. Being a student does not give you a special exemption from NI.

Zero-hours, casual and agency work

If you are on zero-hours or casual work, you may have weeks where your pay is above the threshold and weeks where it is below it. In weeks where you are below the threshold, you will not pay NI on that job.

Each job is looked at separately. If your earnings are uneven, your NI contributions may be patchy. You may gain qualifying years automatically if:

  • Your earnings are often above the lower earnings limit, even if you do not pay NI in some weeks, or
  • You receive NI credits because of benefits (for example, some benefits for carers or unemployed people).

National Insurance for the self-employed (Class 4 and Class 2 changes)

If you are self-employed (for example a sole trader, freelancer or partner in a business), you pay National Insurance through your Self Assessment tax return.

There have been big changes recently, especially from April 2024.

Class 4 NI – the main charge on profits

Class 4 NI is based on your annual taxable profits, not your weekly earnings.

For 2024/25 and 2025/26, the broad structure is:

  • No Class 4 NI on profits below the lower profits limit (linked to £12,570).
  • A main rate (for example 6%) on profits between the lower profits limit and the upper profits limit (linked to £50,270).
  • A smaller rate (for example 2%) on profits above the upper profits limit.

These figures give a sense of the current system, but you should always confirm the exact rates and thresholds for the year in question using:

Big change: Class 2 NI from April 2024

Historically, self-employed people also paid Class 2 NI, a flat weekly amount. From 6 April 2024, the government changed this:

  • If your profits are at or above the lower profits limit (linked to £12,570), you no longer have to pay Class 2 contributions but you are treated as if you had paid for State Pension purposes.
  • If your profits are low, you may be able to pay Class 2 voluntarily to protect your record (instead of paying the more expensive Class 3).
  • If you are working abroad or in certain special cases, Class 2 may still be relevant.

The rules for low-profit and overseas cases are quite detailed. The safest route is to read the up-to-date guidance on GOV.UK and, if needed, get advice from a tax adviser or HMRC:

Self-employed and employed at the same time

Many people have both:

  • a job where they are an employee, and
  • self-employed income on the side.

In that case:

  • Your employer deducts Class 1 NI from your wages.
  • You pay Class 4 NI (and possibly Class 2 in special cases) on your self-employed profits through Self Assessment.
  • The annual NI limit may mean you can claim back some NI if your combined contributions are very high.

The rules are complex, so a tax adviser or accountant can be useful if your income is high or varied.

Voluntary National Insurance (Class 3)

Sometimes you may want, or need, to pay NI even when you do not have to. This is usually to fill gaps in your record so you can get:

  • a full State Pension, or
  • access to certain contribution-based benefits.

Voluntary NI is usually paid as Class 3 contributions.

When you might consider paying Class 3

You might think about paying voluntary NI if:

  • You spent time abroad and did not pay UK NI.
  • You were not working and did not get NI credits.
  • You have taken many years out of paid work (for example to care for children or relatives) and did not receive credits.
  • You have already reached, or are close to, State Pension age and have gaps that could reduce your pension.

Before paying, always:

  1. Check your NI record online.
  2. Get a State Pension forecast.
  3. Read the guidance or speak to the Future Pension Centre or an adviser. In some cases, paying is not good value or is not needed because of credits.

Useful official links:

Deadlines for backdating contributions

There are strict time limits on how far back you can pay for missing years. In general, you can usually only go back six tax years. However, there have been special, time-limited extensions that let some people fill gaps going back as far as 2006/07.

Because these rules and deadlines can change, always check the latest GOV.UK guidance or speak to the Future Pension Centre before paying large sums.

National Insurance credits

National Insurance credits can fill gaps in your record without you paying money. Credits are usually given when you cannot work or are caring for someone and meet certain conditions.

Common situations where you may get NI credits

You may receive NI credits if you are:

  • Receiving certain benefits (for example, Jobseeker’s Allowance or Employment and Support Allowance).
  • Claiming Carer’s Allowance or entitled to Carer’s Credit.
  • A parent or foster parent of a child under 12 and receiving Child Benefit in your name.
  • On certain maternity or parental leave benefits.

The exact list of qualifying situations is available on GOV.UK: National Insurance credits.

Why credits matter

Credits can count as qualifying years for the State Pension, even if you are not paying NI.

For example:

  • Someone who stays at home to care for children may build qualifying years through credits linked to Child Benefit.
  • A person unable to work due to illness may get credits through certain benefits.

This is why it is essential to:

  • Claim benefits and credits you are entitled to.
  • Check your NI record regularly.

National Insurance and the State Pension

Your National Insurance record is the main factor in how much new State Pension you receive.

How many years you need

For people reaching State Pension age under the new system:

  • You usually need 35 qualifying years of NI contributions or credits for the full new State Pension.
  • You generally need at least 10 qualifying years to get any State Pension at all.

Some people will be under older rules which can be more complex. The easiest way to know your position is to get a State Pension forecast:

Filling gaps to improve your pension

If your forecast shows you will not get the full State Pension, you could:

  • Work and pay NI for more years.
  • Claim benefits or credits that protect your record.
  • Pay voluntary NI contributions (Class 3, or Class 2 in some self-employed low-profit cases) for missing years.

Before paying voluntary NI:

  • Check that the year can still be bought (you may be out of time for older years).
  • Check whether adding that year will actually increase your State Pension, sometimes it does not.

The government’s advice is usually to contact the Future Pension Centre before making voluntary payments. Their details are on GOV.UK: Future Pension Centre.

Checking and managing your National Insurance record

How to check your NI record

To see your NI history, use your Government Gateway or digital identity to sign in to your personal tax account:

You will see:

  • Each tax year and whether it counts as a full qualifying year
  • Gaps and how much you may have to pay to fill them
  • Years covered by credits

Fixing errors or missing years

If you think your NI record is wrong:

  1. Gather evidence (payslips, P60s, benefit letters, etc.).
  2. Use the contact details on GOV.UK to ask HMRC or the relevant department to review your record.
  3. Keep copies of all letters and responses.

Fixing errors early can prevent problems when you claim State Pension or benefits later.

National Insurance if you work abroad or move countries

If you live or work outside the UK, National Insurance can become more complex. The rules depend on:

  • Where you are working
  • How long you are away
  • Whether your employer is UK-based or local
  • Whether the UK has a social security agreement with that country

Working temporarily abroad

If you work abroad for a UK employer for a limited time, you may still pay UK National Insurance instead of paying into the system of the country you are working in. This is often proved with a certificate (for example, an A1 form within the EU).

Moving abroad long-term

If you move abroad long-term, you may:

  • Pay into the social security system of your new country instead of UK NI, and/or
  • Choose to pay voluntary UK NI to protect your UK State Pension entitlement.

Because the rules depend on international agreements and can change, it is essential to get up-to-date information. Start with:

National Insurance for employers (brief overview)

Employers pay their own National Insurance contributions on most employees’ earnings above a certain level. This is on top of the employee’s NI.

Key points:

  • Employers pay Class 1 NI at a percentage of each employee’s earnings above the “secondary threshold”.
  • There are different rules for certain employees (for example, under-21s, apprentices, and some veterans).
  • Employers also pay Class 1A and Class 1B NI on some benefits in kind and on PAYE Settlement Agreements.

The rates and thresholds for employers have changed in recent years, including increases in the employer NI rate and changes to thresholds. Employers should always refer to the detailed GOV.UK guidance:

National Insurance refunds and overpayments

Sometimes people pay too much National Insurance. Common situations include:

  • Having more than one job and paying NI on each job as if they were separate.
  • Paying NI after reaching State Pension age.
  • Being put in the wrong NI category or code by mistake.

How to claim a refund

If you think you have overpaid NI:

  1. Check your payslips and P60s to confirm the amounts deducted.
  2. Compare them with what you should have paid, using GOV.UK tools or guidance.
  3. Use the official refund process:

HMRC may refund you directly or adjust your future tax code in some cases.

National Insurance in special life situations

Starting work for the first time

When you start your first job:

  • Your employer will ask for your NI number.
  • They will deduct Income Tax and NI if your pay is high enough.
  • Make sure your NI number is correct so your contributions go on your record.

If you do not have an NI number yet, you can still start working, but apply for one as soon as possible: Apply for a National Insurance number.

Going on maternity, paternity or adoption leave

If you receive Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Shared Parental Pay or Statutory Adoption Pay, NI is usually deducted as normal on those payments.

In some cases, if you receive Maternity Allowance instead of SMP, you may get NI credits rather than contributions.

Long-term illness or disability

If you cannot work due to illness or disability, you may receive benefits, such as certain types of Employment and Support Allowance (ESA). These may give you NI credits that count towards your record.

Check the NI credits guidance and any benefits you receive:

Caring for children or adults

Many carers worry about their pension because they are not in paid work. If you care for someone for at least 20 hours a week, or you get certain benefits, you may be able to get:

  • Carer’s Allowance, or
  • Carer’s Credit, which can protect your NI record.

See:

Common myths about National Insurance

Myth 1: National Insurance is a savings pot with my name on it

Not exactly. NI works like a tax. Your contributions help pay current pensions and benefits. They are not kept in a personal account for you, although your record of contributions does affect your future entitlement.

Myth 2: I cannot get the State Pension if I have ever had a gap

Gaps do not automatically block you from getting a pension. What matters is the total number of qualifying years. You can often fill gaps using credits or voluntary contributions.

Myth 3: Students never pay NI

Wrong. Students pay NI like anyone else if their earnings are high enough.

Myth 4: Self-employed people do not get a State Pension

Self-employed contributions do count towards the State Pension. The rules and rates differ, but self-employed people can still build a full State Pension if they have enough qualifying years.

Myth 5: My workplace pension is the same as my State Pension

No. Your workplace or private pension is separate. National Insurance contributions affect your State Pension, not your workplace or private plans, though all of them contribute to your income in later life.

National Insurance FAQs

Do I pay NI on my State Pension?

No. You do not pay NI on your State Pension. You might pay Income Tax on it if your total income is high enough, but not NI.

Do I pay NI if I am over State Pension age and still working?

You should not pay employee NI once you reach State Pension age. Your employer should stop NI deductions from the first pay period after you reach that age.

If NI is still being taken, speak to your employer and check your date of birth on their records. If necessary, contact HMRC.

I have never worked. Will I get a State Pension?

You may still get some State Pension if you have qualifying years from credits. For example, if you have received certain benefits or Child Benefit in your name, you may have built up entitlement without paying NI through work.

The only way to be sure is to check your NI record and State Pension forecast:

I am on a low income. Can I avoid paying NI?

You only pay NI if your earnings or profits are above the thresholds. If your income is below those levels, you will not pay NI.

However, if you are thinking of reducing your official income to avoid NI, be careful. This can reduce your pension and benefit entitlement, and may cause problems with HMRC if done incorrectly.

Is it worth paying voluntary NI?

It depends. Paying voluntary NI could be good value if:

  • You are close to State Pension age.
  • You have only a few missing years.
  • Paying for those years increases your pension.

But for some people, paying will not increase their pension. That is why the government and most independent advisers suggest checking your forecast and speaking to the Future Pension Centre or a regulated adviser before paying.

How often do NI rates change?

NI rates and thresholds are normally reviewed in each Budget or fiscal event and can change with each tax year. In recent years there have been several changes, including reductions in the main employee and self-employed rates and increases in the employer rate.

Always use current-year information from:

How can I quickly estimate my NI?

Several trusted organisations provide up-to-date NI calculators. These tools let you enter your income and see an estimate of your contributions for the current tax year.

For example, you can use the calculator from the consumer organisation Which?

Remember: calculators give estimates. Always check your payslips and Self Assessment for the exact amounts.

Where to get trusted help with National Insurance

Because NI rules can be complex, especially if you have mixed income or work abroad, it is wise to use trusted sources.

 Quick National Insurance checklist

Use this checklist to stay on top of your NI and protect your future pension:

  1. Know your NI number. Keep it safe and use it correctly with employers and HMRC.
  2. Check your payslips. Make sure NI is being taken correctly, especially when you change jobs.
  3. Review your NI record online. Look for gaps and errors at least every few years.
  4. Understand your situation. Are you employed, self-employed, or both? Make sure you know which NI classes apply.
  5. Use credits. If you are caring for someone, unemployed, or on certain benefits, make sure you are getting NI credits you are entitled to.
  6. Plan for your pension. Check your State Pension forecast and think about whether you need to fill gaps.
  7. Get help early. If something looks wrong or confusing, contact HMRC, the Future Pension Centre, Citizens Advice or a professional adviser.

Understanding National Insurance does not need to be complicated. If you keep an eye on your record and use official tools and advice, you can make sure your contributions work for you, now and when you retire.

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