National Insurance (NI) is a key part of the UK’s social security system. It helps fund benefits and state pensions.
Knowing the latest NI rates and when they change is important for anyone living and working in the UK. This guide will help you understand the different NI classes, who needs to pay, and when the rates are updated.
What Are National Insurance Rates?
National Insurance rates are the amounts you pay to qualify for benefits and state pensions. These rates depend on your job type and income. The UK Government updates these rates regularly. To stay current, always check the official UK Government website.
National Insurance Classes and Rates
Class 1: For Employees
Employer Rates:
- Above Secondary Threshold: 13.8%
- Below Upper Secondary Threshold: 0%
Employee Rates:
- Between Primary Threshold and Upper Earnings Limit: 12%
- Above Upper Earnings Limit: 2%
- Deferring National Insurance: 2%
Class 2 and Class 4: For Self-Employed
Class 2:
- Small Profits Threshold (yearly): £6,725
- Lower Profits Threshold (yearly): £12,570
- Weekly Rate: £3.45
Class 4:
- Lower Profits Limit: £12,570
- Upper Profits Limit: £50,270
- Between Lower and Upper Profits Limit: 9%
- Above Upper Profits Limit: 2%
Class 3: Voluntary Contributions
- Weekly Rate: £17.45
For the latest NI rates, check the UK Government’s website.
Who Pays National Insurance Contributions?
If you’re over 16 and earn more than £242 per week or £12,570 per year as a self-employed person, you need to pay NI. Even if you earn between £123 and £242 per week or between £6,725 and £12,570 per year as self-employed, you might still get some benefits without paying contributions.
When Do National Insurance Rates Change?
NI rates usually change every year in April. The current rates are valid from April 6, 2024, to April 5, 2025. New rates will start on April 6, 2024, and will be announced by the UK Government.
National Insurance Classes Explained
Class 1: For Employees
- Who Pays: Employees earning over £242 per week.
- Payment Method: Deducted from the employee’s pay by the employer.
Class 1A or 1B: For Employers
- Who Pays: Employers for their workers’ expenses and benefits.
Class 2: For Self-Employed
- Who Pays: Self-employed individuals earning over £12,570 per year.
Class 3: Voluntary Contributions
- Who Pays: Anyone who wants to fill gaps in their NI record.
Class 4: For Self-Employed
- Who Pays: Self-employed individuals earning over £12,570 per year.
You can check your contributions on your payslip or through self-assessment if you make Class 2 or Class 4 payments.
When to Stop Paying National Insurance Contributions?
You stop paying NI when you reach state pension age. For Class 1 or Class 2 contributions, payments stop at state pension age. For Class 4, payments stop from April 6 after reaching state pension age.
What is a National Insurance Number?
Your NI number helps ensure your contributions and taxes are recorded correctly. You can find it on your payslips, tax letters, or benefit letters. Keep it private to avoid identity theft.
Understanding National Insurance rates is important for managing your benefits and state pension.
Keep track of the rates, know when they change, and protect your NI number to ensure your benefits are safe. For the most current information, always refer to the UK Government website.
1. What is National Insurance?
National Insurance (NI) is a system in the UK where people pay contributions to fund benefits and state pensions. It helps ensure that people receive financial support when they retire or need help due to illness or unemployment.
2. Who needs to pay National Insurance?
If you’re over 16 and earn more than £242 per week or £12,570 per year if self-employed, you must pay NI. Even if you earn slightly less, you might still get some benefits without paying full contributions.
3. When do National Insurance rates change?
National Insurance rates usually change every year in April. The current rates are effective from April 6, 2024, to April 5, 2025. New rates will be announced by the UK Government and start on April 6, 2024.
4. How do I check my National Insurance contributions?
You can check your NI contributions on your payslips or through self-assessment if you make Class 2 or Class 4 payments. Your NI number helps track your contributions and ensure they are recorded correctly.
5. When do I stop paying National Insurance contributions?
You stop paying NI contributions when you reach state pension age. For Class 1 or Class 2 contributions, payments end at this age. For Class 4, payments stop from April 6 after reaching state pension age.
