What is a National Insurance Number?

Everyone who works in the UK is legally obliged to have a national insurance number from the age of 16.

Each individual has a unique NI (national insurance) number that comprises a pattern of 2 letters, 6 numbers (shown in pairs) and 1 letter. For example: XZ 34 56 73 Q.

Despite the fact the no-one else can have your NI number; it is not considered an official form of identification.

National insurance (NICs) is a tax on your earnings that goes into the government’s national insurance fund. This pays for assorted state benefits, like the state pensions.

Find out how more about national insurance and the importance of your national insurance number in our guide.

Where do I get a national insurnace number from?

Your national insurance number is administered and issued by the Department of Work and Pensions (DWP).

Normally your national insurance number (NINO) is automatically sent to you by post four months prior to your 16th birthday. It will be sent to the address the DWP have on file for you at that time.

Why is my national insurance number important?

You need a national insurance to work, claim benefits and apply for things like a bank account or student loan.

A national insurance number serves as a unique identifier for individuals so the government can accurately track and record the national insurance contributions or taxes you pay to HMRC.

Where can I find my national insurance number?

If you can’t find your national insurance number don’t worry there are a number of different ways to locate it.

You can start by checking tax related paperwork like payslips, P60’s, and P45’s.

HMRC gives you access to your NINO online via their app and your personal tax account and some other ways both online and offline.

How to apply for a national insurance number

If you have never received a national insurance number automatically you should apply for one online via the .GOV website.

You will need to prove your identity as part of the national insurance number application process.

Remember, if you are working, you must legally have a NI number this includes self employed, new jobs or jobseekers.

HMRC will get in touch by post with your NI number when your application has been processed. This is a very important piece of personal information, keep it safe and secure.

You will need to pass it on to your employer straightaway. Whenever you contact the Department for Work and Pensions or HMRC, you will be asked for it.

Who has to pay national insurance?

It applies to all earners, from the age of 16 to state pension age, in Northern Ireland, Scotland, Wales and England.

Once you have reached the state pension age, you no longer have to pay NICs, even if you continue to be employed.

How much NICs do I have to pay and how do I pay it?

This depends on how you are employed. Each employment situation has its own NICs rules to follow, including: employed, self employed, more than one employer and both self employed and employed at the same time.

I work for an employer, how do I pay national insurance?

If you work for someone else as an employee under PAYE, then you pay class 1 national insurance contributions also known as primary contributions.

Your employer also has to pay into this fund; this is called ‘secondary contributions’ or Class 1A NICs. This is partly to cover statutory entitlements, like sick pay or maternity pay.

Class 1 national insurance is automatically taken out of your gross salary just like income tax by your employer, before you receive your pay packet.

National insurance and being self employed

This is a slightly more complex scenario and depends on how much you earn.

Options:

• Class 2 NICs – voluntary NI payment.
• Class 4 – paid on profits only, paid through Self-Assessment process alongside your Income Tax.
• Class 3 – voluntary NIC payment, one yearly payment, monthly Direct Debit or quarterly bill.

How does national insurance work if I am self employed and employed simultaneously?

An increasing number of people are both self-employed and employed at the same time. In this case, you may pay class 2 (volunatarily) or 4 NICs on your self employed earnings and class 1 NIC on your employed income.

If you are going to pay more than you need to with class 1, class 2 and class 4 NIC payments, then you can also defer some class 4 NICs.

You have to apply for a deferment, using Form CA72B ‘Application for deferment of payment of class 2 and/or class 4 NICs’.

What NICs do I pay if I have more than one job?

As an employee, each separate job is considered for NICs individually, so the £155 starting threshold applies to each one.

But, if you are not obliged to pay NICs on both jobs, you have to ask to defer NICs payment for the other – it won’t just happen automatically.

You will need Form CA72A ‘Application for deferment of payment of class 1 NICs’ from the GOV.UK website.

What does the National Insurance Fund actually pay for?

There is a complex range of benefits available in the UK system. Some of these can only be given to residents that have already paid NICs, known as ‘contributory benefits’.

These include: State Pension, Maternity Allowance, Contribution-based Employment and Support Allowance, Widow’s Benefits and Contribution-based Jobseeker’s Allowance.

Are there other state benefits that are not dependent on having paid NICs?

Yes, there are other state benefits that are not dependent on the individual having paid NICs.

These include: Carer’s Allowance, Industrial Injuries benefits, Child Benefit, Severe Disablement Allowance, Income-based Jobseeker’s Allowance, Guardian’s Allowance, Attendance Allowance, Disability Living Allowance and Personal Independence Payment.

Does it matter what ‘Class’ of NICs I pay?

Yes, not every class of NIC covers every benefit payment entitlement:

• Class 1 NICs – you are entitled to receive all benefits.
• Class 2 NICs – can receive all except Additional State Pension and Contribution-based Jobseeker’s Allowance.
• Class 3 NICs – only covers the Basic State Pension and Widow’s Benefits.

Is it possible to overpay national insurance?

Yes, if you have an employment situation that is more complex than one, PAYE position, then there is every chance that you may be overpaying your NICs. The good news is that you can reclaim this overpayment from HMRC.

HMRC do not have a system for checking this, the onus is on each taxpayer to keep an eye on their own NICs situation. Have a look at our Guide to National Insurance Refunds to see if you are eligible.

How do I contact the national insurance office?

If you have any national insurance general enquiries you can contact the national insurance office by phone, online and by post.