National Insurance Explained: What You Pay and Why
National Insurance (NI) is a key part of the UK tax system, helping to fund services like the NHS, the State Pension, and certain benefits. If you earn above a specific threshold, you will usually have to pay NI. The amount and type you pay depend on your employment status, age, and level of income.
If you are new to UK taxation, you may also want to read our Beginner’s Guide to UK Tax Bands and Allowances for context on how NI fits into the wider system.
Who Has to Pay National Insurance?
You will normally need to pay NI if you are:
- Employed and earning more than £1,048 a month (£12,570 a year)
- Self-employed and making profits above £12,570 a year
- Between 16 years old and State Pension age
National Insurance Classes
NI is split into different "classes," which determine how contributions are collected and what benefits you are entitled to.
- Class 1: Paid by employees and their employers via PAYE.
- Class 2: Flat-rate contributions paid by self-employed workers to qualify for benefits like the State Pension.
- Class 3: Voluntary contributions you can make to fill gaps in your record.
- Class 4: Paid by self-employed workers as a percentage of annual profits.
National Insurance Rates for 2025/26
Here are the current NI rates for the 2025/26 tax year:
| Class | Who Pays | Rate |
|---|---|---|
| Class 1 (Employees) | Employees earning £12,570–£50,270 | 8% on earnings in this band, 2% above £50,270 |
| Class 1 (Employers) | Employers on employee earnings above £9,100 | 13.8% (no upper limit) |
| Class 2 | Self-employed | Flat rate (currently £3.45 per week) |
| Class 4 | Self-employed profits £12,570–£50,270 | 6% on profits in this band, 2% above £50,270 |
Why National Insurance Matters
Your NI record affects your eligibility for various state benefits, including:
- The State Pension
- Maternity Allowance
- Jobseeker’s Allowance (New Style)
- Bereavement benefits
To receive any State Pension, you usually need at least 10 qualifying years of contributions. For the full new State Pension, you will need 35 qualifying years.
How to Check Your NI Record
You can view your contribution history and identify any gaps by visiting the Check your National Insurance record service on GOV.UK. This will show:
- Your qualifying years so far
- Any gaps that could reduce your State Pension
- Options to pay voluntary Class 3 contributions
Keeping your NI record up to date ensures you remain eligible for key state benefits and provides peace of mind about your future entitlements.
Frequently Asked Questions
Do I still pay NI after State Pension age?
No, once you reach State Pension age you no longer have to pay NI, even if you continue working.
Can I pay extra NI to boost my State Pension?
Yes, you can make voluntary Class 3 contributions to fill gaps in your record. This is often worthwhile if you have several missing years.
Is National Insurance the same as income tax?
No. While both are collected through PAYE for employees, income tax funds general government spending, whereas NI funds specific benefits and services.