Family finances:
National insurance
National insurance contributions are effectively a form of tax on earnings but their payment entitles you to certain (contributory) social security benefits.
Class 1 National insurance contributions are paid by employees and count towards the entitlement to the state retirement pension, contribution-based jobseeker’s allowance, incapacity benefit, bereavement benefits, and maternity allowance.
Class 2 National insurance contributions are paid by the self employed and count towards the entitlement to the state retirement pension, incapacity benefit, bereavement benefits, maternity allowance but not usually contribution-based jobseeker’s allowance.
Class 3 National insurance contributions are voluntary contributions which can be paid by non-employed people who want to fill in gaps in their contribution history, usually to ensure their entitlement to the basic state pension and bereavement benefits.
Class 4 National insurance contributions are paid by the self employed and do not give any entitlement to any benefits.
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Where next?
Within Overview of the UK personal tax system...
Within Family finances
- Managing your paperwork
- Managing your money
- Self assessment and tax returns
- Caring for elderly relatives
General…
