What is National Insurance/NIC?

2 Dec 10

Anyone who is aged between 16 and state pension age – currently 60 for a woman and 65 for a man - may have a liability to pay National Insurance contributions. You may be liable to pay National Insurance contributions if you:

  • work for an employer (an employed earner), and pay Class 1 National Insurance Contributions
  • work for yourself (self employed), and pay Class 2 and Class 4 National Insurance contributions

The amount of contributions you have to pay will depend on whether you are an employed earner or self employed; and the amount you earn. There may be occasions when you may work for an employer and for yourself at the same time. In these instances you may have to pay more than one class of contribution. Someone who is not liable to pay National Insurance contributions may be able to pay certain contributions on a voluntary basis (normally Class 3 National Insurance contributions). These contributions are payable to safeguard or improve benefit entitlement for Basic State Pension and Bereavement Benefits. Anyone who is over State Pension age does not have to pay Class 1 or Class 2 National Insurance contributions, except on earnings that should have been paid before State Pension Age.

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