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Why do I have to pay National Insurance?

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You pay NICs to build up your entitlement to certain social security benefits, including the State Pension.

The type and level of NICs you pay depends on how much you earn and whether you're employed or self employed. You will pay NICs if you are an employee or self-employed and you are aged 16 and over, providing your earnings are more than a certain level.  You stop paying NICs when you reach State Retirement Age, which currently stands at 65 for men and 60 for women, however the retirement age for women will gradually increase to 65 for both genders over the period 2010 to 2020.

Your NI number

Your NI number is your own personal account number. The number ensures that the NICs and tax you pay are properly recorded on your account. It also acts as a reference number for the entire social security system.

The only people you should ever give your NI number to are:

  • HM Revenue & Customs (HMRC).
  • Your employer.
  • Jobcentre Plus, if you claim Jobseeker's Allowance.
  • Your local council, if you claim Housing Benefit.

Entitlement to many benefits depends on your NIC record so it's very important not to give your number to anyone else. You will also be required to provide your NI number if you open an Individual Savings Account (ISA).

More on National Insurance
What do I get from paying National Insurance?

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