National Insurance comes out of your payslip every month, but most people couldn't explain how it's calculated. Understanding NI is crucial — it affects your State Pension, maternity pay, and other benefits.
What Is National Insurance?
NI is a tax on earnings that funds the State Pension, NHS, and certain benefits. You start paying when you earn above the Primary Threshold (around £12,570/year for employees).
NI Classes Explained
Different classes apply depending on employment status.
- Class 1: Employees earning above the Primary Threshold (8% up to £50,270, 2% above)
- Class 2: Since April 2024, self-employed people with profits above £7,105 no longer pay it but still get the State Pension credit; those below can pay voluntarily (£3.65/week in 2026/27)
- Class 3: Voluntary contributions to fill gaps (£18.40/week in 2026/27)
- Class 4: Self-employed on profits between £12,570 and £50,270 (6%, then 2% above)
How NI Affects Your State Pension
You need 35 qualifying years for the full new State Pension (£241.30/week in 2026/27), and at least 10 to get any. Check your NI record on HMRC's website — you might have gaps. Voluntary Class 3 contributions can fill gaps and are often excellent value.
Common NI Mistakes
If you have two jobs, check you're not overpaying NI. If you've had a wrong tax code, you may have paid incorrect NI. Overpayments can be reclaimed going back years.
Frequently Asked Questions
Do I pay NI after State Pension age?
No. Once you reach State Pension age, you stop paying NI even if you continue working.
How do I check my NI record?
Log in to your HMRC Personal Tax Account at gov.uk to see your full record and State Pension forecast.
Should I pay voluntary NI contributions?
If you have gaps and are far from 35 years, each extra qualifying year can add about £358/year (1/35 of the full new State Pension) to your State Pension for life, for a Class 3 cost of £956.80 a year in 2026/27.
- national insurance
- UK tax
- HMRC
- state pension
- UK finance