View source for National Insurance

{{Short description|Tax and social benefit system in the UK, introduced in 1911}}
{{Use dmy dates|date=October 2020}}
{{for|the proposed scheme in Australia|National Insurance (Australia)}}
{{UKtaxation}}
'''National Insurance''' ('''NI''') is a fundamental component of the [[welfare state in the United Kingdom]]. It acts as a form of [[social security]], since payment of NI contributions establishes entitlement to certain state benefits for workers and their families.

Introduced by the [[National Insurance Act 1911]] and expanded by the [[Attlee ministry]] in 1948, the system has been subjected to numerous amendments in succeeding years. Initially, it was a contributory form of insurance against illness and unemployment, and eventually provided retirement pensions and other benefits.<ref name=fifthreport>{{cite web|author=The Committee Office, House of Commons |url=https://publications.parliament.uk/pa/cm199900/cmselect/cmsocsec/56/5605.htm |title=www.parliament.uk: Select Committee on Social Security Fifth Report, the Contributory Principle: The relationship between tax and National Insurance |publisher=Publications.parliament.uk |access-date=21 May 2010}}</ref>

Currently, workers pay contributions from the age of sixteen years, until the age they become eligible for the State Pension. Contributions are due from employed people earning at or above a threshold called the Lower Earnings Limit, the value of which is reviewed each year. Self-employed people contribute through a percentage of net profits above a threshold, which is reviewed periodically. Individuals may also make voluntary contributions to fill a gap in their contributions record and thus protect their entitlement to benefits.

Contributions are collected by [[HM Revenue and Customs]] (HMRC). For employees, this is done through the [[Pay-as-you-earn tax|PAYE]] (Pay As You Earn) system along with [[Income Tax]], repayments of [[Student loans in the United Kingdom|Student Loans]] and any [[Apprenticeship Levy]] which the employer is liable to pay.<ref>{{Cite news|url=https://www.gov.uk/paye-for-employers|title=PAYE and payroll for employers|work=GOV.UK|access-date=2018-05-11|language=en}}</ref> National Insurance contributions form a significant proportion of the UK Government's revenue, raising £145 billion in 2019-20 (representing 17.5% of all tax revenue).<ref>{{Cite web|url=https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/national-insurance-contributions-nics/|title = National Insurance Contributions (NICs)}}</ref>

The benefit component includes several contributory benefits, availability and amount of which is determined by the claimant's contribution record and circumstances. Weekly income and some lump-sum benefits are provided for participants upon death, retirement, unemployment, maternity and disability. In order to obtain the benefits which are related to the contributions, a [[National Insurance number]] is necessary.<ref>{{Cite news|url=https://www.gov.uk/national-insurance|title=National Insurance|work=GOV.UK|access-date=2018-05-11|language=en}}</ref>

==History==
[[File:1940 British National Insurance card for an employed woman.jpg|thumbnail|right|A 1940 contribution card for an employed woman]]
The current system of National Insurance has its roots in the [[National Insurance Act 1911]], which introduced the concept of benefits based on contributions paid by employed people and their employer. William Martin-Smith was issued with the First NI number A1.<ref>{{cite web|url=http://discovery.nationalarchives.gov.uk/SearchUI/Details.mvc/Collection/?iAID=11523|title=Ministry of Labour and Ministry of National Insurance: National Insurance Stamps, correspondence |publisher=nationalarchives.gov.uk |access-date=30 October 2011}}</ref> The chosen means of recording the contributions required the employer to buy special stamps from a Post Office and affix them to contribution cards. The cards formed proof of entitlement to benefits and were given to the employee when the employment ended, leading to the loss of a job often being referred to as being ''given your cards'', a phrase which endures to this day although the card itself no longer exists.<ref>{{Cite OED|card|id=27830}}</ref>

Initially there were two schemes running alongside each other, one for health and pension insurance benefits (administered by "approved societies" including friendly societies and some trade unions) and the other for unemployment benefit which was administered directly by government. The [[Beveridge Report]] in 1942 proposed expansion and unification of the welfare state under a scheme of what was called social insurance. In March 1943 [[Winston Churchill]] in a broadcast entitled "''After the War''" committed the government to a system of "national compulsory insurance for all classes for all purposes from the cradle to the grave."<ref>{{cite book|last1=Kynaston|first1=David|author-link=David Kynaston|title=A World to Build|date=2007|publisher=Bloomsbury|location=London|isbn=9780747585404|page=[https://archive.org/details/worldtobuild0000kyna/page/24 24]|url=https://archive.org/details/worldtobuild0000kyna/page/24}}</ref>

Following the Second World War, the Attlee government pressed ahead with the introduction of the [[Welfare State]], of which an expanded National Insurance scheme was a major component. As part of this process, in 1948, a single stamp was introduced which covered all the benefits of the new Welfare State. At that point, responsibility passed  to the new Ministry of National Insurance; many of the former approved societies went into liquidation as a result.

Stamp cards for class 1 (employed) contributions persisted until 1975 when these contributions finally ceased to be flat-rate and became earnings related, collected along with Income Tax under the PAYE procedures. Making NI contributions is still often described by people as ''paying their stamp''.<ref>{{cite web|author=Department of the Official Report (Hansard), House of Commons, Westminster |url=https://publications.parliament.uk/pa/cm199697/cmhansrd/vo970225/debtext/70225-15.htm |title=www.parliament.uk: report on debate which refers to the phrase 'paying the stamp' |publisher=Publications.parliament.uk |access-date=21 May 2010}}</ref>

As the system developed, the link between individual contributions and benefits was weakened.

=== National Insurance Fund ===

The [[National Insurance Fund]]s are used to pay for certain types of welfare expenditure and National Insurance payments cannot be used directly to fund general government spending. However, any surplus in the funds is invested in government securities, and so is effectively lent to the government at low rates of interest. National Insurance contributions are paid into the various National Insurance Funds after deduction of monies specifically allocated to the [[National Health Service]]s (NHS). However a small percentage is transferred from the funds to the NHS from certain of the smaller sub-classes. Thus the four NHS organisations are partially funded from NI contributions but not from the NI Fund.<ref>{{cite web|url=http://www.opsi.gov.uk/acts/acts1992/ukpga_19920005_en_17#pt12-l1g161 |title=Social Security Administration Act 1992 |publisher=Opsi.gov.uk |date=6 April 1990 |access-date=21 May 2010}}</ref> Less than half of benefit expenditure (42.1%) now goes on contributory benefits, compared with over 65% in 1978–79 because of the growth of means-tested benefits since the late 1970s.<ref>{{cite web|last1=Seeley|first1=Anthony|title=National Insurance contributions : an introduction|url=https://www.parliament.uk/briefing-papers/sn04517.pdf|publisher=House of Commons Library|access-date=23 December 2018|date=10 June 2014}}</ref>

An [[actuary|actuarial]] evaluation of the long-term prospects for the National Insurance system is mandated every 5 years, or whenever any changes are proposed to benefits or contributions. Such evaluations are conducted by the [[Government Actuary's Department]] and the resulting reports must be presented to the UK Parliament. The most recent review was conducted as at April 2020, with the report being published two years later.<ref>{{Cite web |title=Government Actuary's Quinquennial Review of the National Insurance Fund as at April 2020 |url=https://www.gov.uk/government/publications/government-actuarys-quinquennial-review-of-the-national-insurance-fund-as-at-april-2020 |access-date=2023-07-02 |website=GOV.UK |language=en}}</ref>

==Contributions==

The contributions component of the system, "National Insurance Contributions" (NICs) are paid by employees and employers on earnings, and by employers on certain benefits-in-kind provided to employees.  The self-employed contribute partly by a fixed weekly or monthly payment, and partly on a percentage of net profits above a certain threshold.  Individuals may also make voluntary contributions, in order to fill a gap in their contributions record and thus protect their entitlement to benefits. Contributions are collected by [[HM Revenue and Customs]] (HMRC) through the [[Pay-as-you-earn tax|PAYE]] system, along with [[Income Tax]] and repayments of [[Student loans in the United Kingdom|Student Loans]] and Postgraduate Loans.

People in certain circumstances, such as caring for a child, caring for a severely disabled person for more than 20 hours a week or claiming unemployment or sickness benefits, can gain National Insurance credits which protects their rights to various benefits.<ref>Understanding the basic State Pension http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/Basicstatepension/DG_10014671</ref>

National Insurance is a significant contributor to UK government revenues, with contributions estimated to comprise 18% of total revenue in the 2019/2020 financial year.<ref>{{cite web |title=Total Revenue Pie Chart for FY 2020 |url=https://www.ukpublicrevenue.co.uk/ |website=UK Public Revenue |access-date=21 November 2019}}</ref>

===Contribution classes===
[[File:1948 6d NI stamp.jpg|right|thumb|A British 1948 National Insurance stamp, once used to collect contributions to the scheme]]
National insurance contributions (NICs) fall into a number of classes.  Class 1, 2 and 3 NICs paid are credited to an individual's NI account, which determines eligibility for certain benefits - including the state pension. Class 1A, 1B and 4 NIC do not count towards benefit entitlements but must still be paid if due.

====Class 1====
Class 1 contributions are paid by employers and their employees. In law, the employee contribution is referred to as the 'primary' contribution and the employer contribution as the 'secondary', but they are usually referred to simply as employee and employer contributions.

The employee contribution is deducted from gross wages by the employer, with no action required by the employee.  The employer then adds in their own contribution and remits the total to [[HMRC]] along with income tax and other statutory deductions. Contributions for employees are calculated on a periodic basis, usually weekly or monthly depending on how the employee is paid, with no reference to earnings in previous periods. Those for company directors are calculated on an annual basis, to ensure that the correct level of NICs are collected regardless of how often the director chooses to be paid.

There are a number of milestone figures which determine the rate of NICs to be paid. These are the Lower Earnings Limit (LEL), Primary Threshold (PT), Secondary Threshold (ST) and Upper Earnings Limit (UEL), though often the PT and ST are set to the same value. The cash value of most of these figures normally changes each year, either in line with inflation or by some other amount decided by the [[Chancellor of the Exchequer|Chancellor]]. The PT is normally indexed to inflation using the [[Consumer Price Index (United Kingdom)|CPI]], while other thresholds remain indexed using the [[Retail Prices Index (United Kingdom)|RPI]].<ref>{{cite web|last=HM Treasury |title=2011 Budget Report (para 1.128) |url=http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf |access-date=26 March 2011 |url-status=dead |archive-url=http://webarchive.nationalarchives.gov.uk/20110801192353/http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf |archive-date=1 August 2011 }}</ref>

*On earnings below the LEL, no NICs are paid because no benefits accrue on earnings below this limit.
*On earnings above the LEL, up to and including the PT, employee contributions are not paid but are credited by the government as if they were (enabling certain low-paid workers to qualify for benefits).
*On earnings above the LEL, up to and including the ST, employer contributions are not paid. 
*On earnings above the PT/ST, up to and including the UEL, NICs are collected at a rate which is determined by a number of factors:
**Whether the employee has reached the age at which [[UK State Pension|State Pension]] becomes payable
**Whether the employee is a married woman paying reduced-rate contributions. This facility was abolished on 11 May 1977 but women who were already paying these contributions at that time were allowed to opt to continue to do so for as long as they remained married (or widowed) and in employment
**Whether the employee is an ocean-going mariner or deep-sea fisherman.
**In the case of the employer contribution, whether the employee is aged under 21 or is an apprentice aged under 25.
*On earnings above the UEL yet another set of rates apply, this time depending only on whether the employee has reached the age at which State Pension becomes payable or is an ocean-going mariner or deep-sea fisherman

=====Table letters=====
As indicated above, the rates at which an individual and their employer pay contributions depend on a number of factors. Consequently, there are many possible sets of employer/employee contribution rates to allow for all combinations of the various factors. HMRC allocate a letter of the alphabet, referred to as an 'NI Table Letter', to each of these sets of contribution rates. Employers are responsible for allocating the correct table letter to each employee depending on their particular circumstances.

Each tax year, HMRC publish look-up tables for each table letter to assist with manual calculation of contributions, though these days most of the calculations are done by computer systems and the tables are available only as downloads. In addition, HMRC provide an online National Insurance Calculator.<ref>{{cite web |title=NICS calculator |url=http://nicecalculator.hmrc.gov.uk/Class1NICs1.aspx |website=HM Revenue & Customs |access-date=21 November 2019}}</ref>

=====Class 1A=====
Class 1A contributions were introduced from 6 April 1991, and are paid by employers on the value of company cars and certain other [[benefit in kind|benefits in kind]] provided to their employees and directors, at the standard employer contribution percentage rate for the tax year. Class 1A contributions do not provide any benefit entitlement for individuals.

=====Class 1B=====
Class 1B contributions were introduced on 6 April 1999 and are payable by employers as part of a PAYE Settlement Agreement (an arrangement whereby the employer meets the tax liabilities on certain benefits). Class 1B contributions are paid at the same rate as Class 1A contributions and do not provide any benefit entitlement for individuals.

=====Contribution rates=====
Contribution rates are set for each tax year by the government.

The general rates for the tax year 2025/26 between 6 April 2025 and 5 April 2026 are shown below.<ref>{{cite web |title=National Insurance rates and categories |url=https://www.gov.uk/national-insurance-rates-letters |website=gov.uk |publisher=UK Government |access-date=31 July 2025}}</ref> For those who qualify for the mariners rates, the employee rates are as shown below and the non-zero employer rates are 0.5% lower than those shown below.

{| class="wikitable"
|+ Employees 
|-
! Weekly salary||Standard||Reduced||Over retirement age
|-
| Up to £123 a week||n/a||n/a||n/a
|-
| £123.01 to £242 a week||0%||0%||0%
|-
| £242.01 to £967 a week||8%||3.85%||0%
|-
| Over £967 a week||2%||2%||0%
|-
|}
{| class="wikitable"
|+ Employers
|-
|-
! Weekly salary||Standard||Reduced||Over retirement age||Under 21 / apprentice under 25
|-
| Up to £123 a week||n/a||n/a||n/a||n/a
|-
| £123 to £175 a week||0%||0%||0%||0%
|-
| £175.01 to £967 a week||15.0%||15.0%||15.0%||0%
|-
| Over £967 a week||15.0%||15.0%||15.0%||15.0%
|-
| Class 1A & 1B||15.0%||15.0%||15.0%||15.0%
|-
|}

====Class 2====
Class 2 contributions are fixed weekly amounts paid by the self-employed until 5 April 2024.<ref name=crunch>{{cite web |last1=Smith |first1=Jake |title=Self-employed National Insurance explained |url=https://www.crunch.co.uk/knowledge/tax/self-employed-national-insurance-explained/ |website=Crunch |access-date=21 November 2019}}</ref> They are due regardless of trading profits or losses, but those with low earnings can apply for exemption from paying and those on high earnings with liability to either Class 1 or 4 can apply for deferment from paying. As of January 2020, self-employed National Insurance Contributions (NICs) will be categorised as Class 2 when profits are between £6,365 and £8,631.99 a year. If a self-employed worker earns £8,632 or more a year they will be categorised as Class 4. Class 2 contributions are charged at £3.00 per week and are usually paid by direct debit.<ref name=gorillaaccounting.com>{{cite web |title=National Insurance for Limited Companies Explained |url=https://gorillaaccounting.com/blog/national-insurance-for-limited-companies-explained/ |website=Gorilla Accounting |date=8 January 2020 |access-date=8 January 2020}}</ref> While the amount is calculated to a weekly figure, they were typically paid monthly or quarterly until 2015. For future years, class 2 is collected as part of the tax self-assessment process. For the most part, unlike Class 1, they do not form part of a qualifying contribution record for contributions-based [[Jobseekers Allowance]], but do count towards [[Employment and Support Allowance]].

====Class 3====
Class 3 contributions are voluntary NICs paid by people wishing to fill a gap in their contributions record which has arisen either by not working or by their earnings being too low.

Class 3 contributions only count towards [[UK State Pension|State Pension]] and [[Bereavement Benefit]] entitlement. The main reason for paying Class 3 NICs is to ensure that a person's contribution record is preserved to provide entitlement to these benefits, though care needs to be taken not to pay unnecessarily as it is not necessary to have contributions in every year of a working life in order to qualify.<ref name="HMRC bereave">{{cite web|url=http://www.hmrc.gov.uk/ni/volcontr/toppingup.htm|title=HM Revenue & Customs: Do you need to top up your National Insurance contributions?}}</ref>

====Class 4====
Class 4 contributions are paid by self-employed people as a portion of their profits.<ref name="crunch" /> The amount due is calculated with income tax at the end of the year, based on figures supplied on the SA100 [[Tax returns in the United Kingdom|tax return]].

Contributions are based around two thresholds, the Lower Profits Limit (LPL) and the Upper Profits Limit (UPL). These have the same cash values as the Primary Threshold and Upper Earnings Limit used in Class 1 calculations.

*No class 4 NICs are due on profits up to and including the LPL.
*Above the LPL, up to and including the UPL, class 4 NICs are paid at a rate which can vary but has been 9% for several years.
*Above the UPL, class 4 NICs are paid at a second rate, which has been 2% for several years<ref>{{cite web|author=HM Revenue & Customs |url=https://www.gov.uk/self-employed-national-insurance-rates |title=Self-employed National Insurance rates |publisher=HM Revenue & Customs |access-date=21 November 2019}}</ref>

Class 4 contributions do not form part of a qualifying contribution record for any benefits, including the State Pension, as self-employed people qualify for these benefits by paying Class 2 contributions.

====NI credits====
People who are unable to work for some reason may be able to claim NI credits (technically ''credited earnings'', since 1987<ref name="HMRC creds">{{cite web|url=http://www.hmrc.gov.uk/manuals/nimmanual/NIM41010.htm|title=Non-benefit credits: Overview: What are National Insurance credits}}</ref>). These are equivalent to Class 1 NICs, though are not paid for. They are granted either to maintain a contributions record while not working, or to those applying for benefits whose contribution record is only slightly short of the requirements for those benefits. In the latter case, they cannot be used to fill "gaps" in past years in contribution records for some benefits.

==Benefits==

The benefit component comprises a number of ''contributory benefits'' of availability and amount determined by the claimant's contribution record and circumstances. Weekly income benefits and some lump-sum benefits to participants upon death, retirement, unemployment, maternity and disability are provided.

===Current benefits===
Benefits for which there is a contribution condition:

*[[Bereavement Support Payment|Bereavement benefit]]
*[[Employment and Support Allowance]]  (new-style)
*[[Jobseeker's Allowance]] (new-style)
*[[Statutory Sick Pay]]
*[[State Pension]]

===Former benefits===
Historic benefits for which there was a contribution condition:

*[[Incapacity Benefit]]
*[[Invalidity Benefit]]
*[[State Earnings-Related Pension Scheme]]
*[[Unemployment Benefit]]
*[[Widowed Mother’s Allowance]]
*[[Widowed Parent's Allowance]]
*[[Widow’s Pension]]

==National Insurance number==
{{main|National Insurance number}}
To administer the National Insurance system, a National Insurance number is allocated to every child shortly after their birth when a claim to Child Benefit is made. People coming from overseas have to apply for a NI number before they can qualify for benefits; although holding a NI number is not a prerequisite for working in the UK, a [[tax code (PAYE)|tax code]] cannot be operated without one. An NI number is in the format: two letters, six digits and one further letter or a space.<ref>{{cite web |url=http://www.cabinetoffice.gov.uk/govtalk/schemasstandards/e-gif/datastandards/identifiers/national_insurance_number.aspx |title=National Insurance Number |publisher=Cabinetoffice.gov.uk |access-date=21 May 2010 |url-status=dead |archive-url=https://archive.today/20120724041005/http://www.cabinetoffice.gov.uk/govtalk/schemasstandards/e-gif/datastandards/identifiers/national_insurance_number.aspx |archive-date=24 July 2012}}</ref> The example used is typically QQ123456C. It is usual to pair off the digits - such separators are seen on forms used by government departments (both internal and external, notably the [[P45 (tax)|P45]] and [[P60]]).

==National Insurance and PAYE Service==
National Insurance contributions for all UK residents and some non-residents are recorded using the NPS computer system (''National Insurance and [[PAYE]] Service''). This came into use in June and July 2009<ref>{{Cite web |url=http://www.hmrc.gov.uk/comp/notes12-1.pdf |title=Archived copy |access-date=23 July 2009 |archive-date=7 March 2012 |archive-url=https://web.archive.org/web/20120307085605/http://www.hmrc.gov.uk/comp/notes12-1.pdf |url-status=dead }}</ref> and brought NIC and Income Tax records together on one system for the first time.

The original National Insurance Recording System (NIRS) was a more archaic system first used in 1975 without direct user access to its records.  A civil servant working within the [[HM Revenue and Customs|Contributions Office]] (NICO) would have to request paper printouts of an individual's account which could take up to two weeks to arrive.  New information to be added to the account would be sent to specialised data entry operatives on paper to be input into NIRS.

NIRS/2, introduced in 1996, was a large and complex computer system which had several uses.  These included individual applications to access or update an individual National Insurance account, to view employer's National Insurance schemes and a general work management application. There was some controversy regarding the NIRS/2 system from its inception when problems with the new system attracted widespread media coverage.  

Due to these computer problems, Deficiency Notices (telling individuals of a possible shortfall in their contributions), which had been sent out on an annual basis prior to 1996, stopped being issued; the [[Inland Revenue]] took several years to clear the backlog. As a result, many people were unaware whether they had incomplete years of contributions towards their [[State Pension]] (including [[WASPI|women]] affected by the rise in [[State_Pension_#State_Pension_age|State Pension age]]).{{Citation needed|date=September 2025}}

==Contribution rates – employees==
As noted above, the employee contribution was a flat rate stamp until 1975. After this, the rates have been as follows:<ref>[http://www.taxhistory.co.uk/National%20Insurance%20rates.htm UK Tax History]</ref><ref>[https://www.gov.uk/government/statistics/main-features-of-national-insurance-contributions National Insurance contributions]</ref>

{| class="wikitable"
! Year !! Lower band !! Upper band !! Above upper band
|-
| 1975–1976 || N/A || 5.5% || N/A 
|-
| 1976–1978 || N/A || 5.75% || N/A 
|-
| 1978–1979 || N/A || 6.5% || N/A 
|-
| 1979–1980 || N/A || 6.75% || N/A
|-
| 1980–1981 || N/A || 7.75% || N/A  
|-
| 1981–1982 || N/A || 8.75% || N/A 
|-
| 1982–1989 || N/A || 9% || N/A  
|-
| 1989–1994 || 2% || 9% || N/A  
|-
| 1994–1999 || 2% || 10% || N/A  
|-
| 1999–2003 || 0% || 10% || N/A 
|-
| 2003–2011 || 0% || 11% || 1% 
|-
| 2011–2022 || 0% || 12% || 2% 
|-
| 2022–2023 || 0% || 12%{{efn|Set at 13.25% from 6 April to 5 November 2022}} || 2%{{efn|Set at to 3.25% from 6 April to 5 November 2022}}
|-
| 2023–2024{{efn|Until 5 January 2024}} || 0% || 12%{{efn|Set at 10% from 6 January to 5 April 2024}} || 2% 
|-
| 2024–present || 0% || 8%|| 2% 
|}

On 7 September 2021, the government announced an increase of NI rates by 1.25 percentage points for the 2022–23 tax year, breaking its 2019 manifesto promise. From 2023, a new [[Health and Social Care Levy|health and social care levy]] charged at the 1.25% rate would be introduced with NI rates reverting to their previous rates.<ref>{{Cite web|url=https://news.sky.com/story/pm-announces-125-national-insurance-hike-to-pay-for-social-care-in-england-12401278|title = PM announces 1.25% National Insurance hike to pay for social care in England}}</ref> This move was reversed by new chancellor [[Kwasi Kwarteng]] effective 6 November 2022.<ref>{{Cite news |date=2022-09-22 |title=National Insurance rise to be reversed in November |language=en-GB |work=BBC News |url=https://www.bbc.com/news/business-62998661 |access-date=2022-09-22}}</ref> 

In the early 2000s the lower threshold for employee contributions was aligned with the standard personal allowance for Income Tax but has since diverged significantly, as illustrated in the following table.

For 2015–16 there was therefore up to £304.80 payable by someone who has not reached the point where they are liable for Income Tax. This has risen to £352.80 for 2016–17, to £400.32 for 2017–18, to £411.12 for 2018-19 and to £464.16 for 2019–20. This fell to £360 for 2020–21.

{|class=wikitable
!Year
!NI employee threshold&nbsp;&nbsp;
!Income Tax allowance
!Charge to NI only
|-
|2007-8
|align=right|£5,205
|align=right|£5,225
|align=right|£20
|-
|2008-9
|align=right|£5,465
|align=right|£6,435
|align=right|£970
|-
|2009-10
|align=right|£5,725
|align=right|£6,475
|align=right|£750
|-
|2010-11
|align=right|£5,725
|align=right|£6,475
|align=right|£750
|-
|2011-12
|align=right|£7,235 
|align=right|£7,475 
|align=right|£240
|-
|2012-13
|align=right|£7,599 
|align=right|£8,105
|align=right|£505
|-
|2013-14
|align=right|£7,755 
|align=right|£9,440 
|align=right|£1,685
|-
|2014-15
|align=right|£7,956 
|align=right|£10,000 
|align=right|£2,036
|-
|2015-16
|align=right|£8,060 
|align=right|£10,600 
|align=right|£2,540
|-
|2016-17
|align=right|£8,060 
|align=right|£11,000 
|align=right|£2,940
|-
|2017-18
|align=right|£8,164 
|align=right|£11,500 
|align=right|£3,336
|-
|2018-19
|align=right|£8,424 
|align=right|£11,850 
|align=right|£3,426
|-
|2019-20
|align=right|£8,632
|align=right|£12,500 
|align=right|£3,868
|-
|2020-21
|align=right|£9,500
|align=right|£12,500 
|align=right|£3,000
|-
|2021-22
|align=right|£9,568
|align=right|£12,570 
|align=right|£3,002
|- 
|2022-28
|align=right| &nbsp;&nbsp;£9,880{{efn|Until 5 July 2022}} <br />£12,570
|align=right|£12,570 
|align=right|£2,690<br />£0
|- 
|}

The upper limit is currently set at the figure at which the higher rate of Income Tax becomes chargeable for a person on the standard personal allowance for Income Tax in all parts of the UK except Scotland (which can set its own level for the tax threshold, but not for the NI upper limit).

The [[Second Johnson ministry|2019-24 government]]'s manifesto in the 2019 general election promised to restore the parity between the NI and Income Tax thresholds by the end of their first term in office. The limits were harmonised on 6 July 2022.

The limits and rates for the following tax year are normally announced at the same time as the autumn budget made by the Chancellor of the Exchequer. Current rates are shown on the hmrc.gov.uk website.

The calculation of contributions for employees has to be made on each pay period (for non-directors of a company).<ref>{{Cite web |date=2025-03-14 |title=Employers' National Insurance Contributions: The Ultimate Guide for UK Businesses - Ecademy |url=https://www.ecademy.digital/finance/employers-national-insurance-contributions-for-uk-businesses/ |access-date=2025-04-07 |language=en-US}}</ref> As a result and unlike [[Taxation in the United Kingdom#Income tax|Income Tax]], a weekly paid employee will face a charge in any week where earnings exceed 1/52 of the annual limit. It is therefore possible for a charge to arise on someone who earns below the limit on an annual basis but who has occasional payments above the weekly limit.

A further complication is that an employee has an allowance per employer, unlike income tax where the allowance is split between employers via the person's tax code. So a person with two low paid jobs would pay less, possibly nothing, than someone who earned the same amount from one job. In addition, no deductions are allowable unlike with Income Tax. This means that NI becomes payable on a greater share of income (immediately after the threshold).

==Notes==
{{noteslist}}
==See also==
* [[H.M. Stationery Office Collection]] A collection of British national insurance stamps in the [[British Library Philatelic Collections]]
* [[National Insurance Fund]]
* [[Beveridge Report]]
* [[Welfare spending]]

==References==
{{reflist}}

== External links ==
{{Commons category}}
* {{Official website}}
* [http://www.hmrc.gov.uk/rates/nic.htm HMRC Up to date national insurance rates tables]
* [http://www.ifs.org.uk/ff/ni.xls National Insurance contribution rates from 1975-76], from the Institute for Fiscal Studies

[[Category:National Insurance]]
[[Category:Taxation in the United Kingdom]]
[[Category:Social security in the United Kingdom]]
[[Category:Retirement in the United Kingdom]]