National Insurance – Payments and Uses
Quick guide to understanding the UK’s National Insurance System of payments and benefits.
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The national insurance number is an individual identification number used in Britain which is used to make payments towards the governments benefit system. In order for you to get benefits and make payments employers will need your number to track payments associated with you.
Payments made and benefits paid are based on four classes
National Insurance Classes
Class 1 – contributions are paid automatically from wages
The contributions paid are made up of an employee contribution and employer contribution based on a number of factors including the amount you earn.
Class 1 national insurance contributions go towards:
- Jobseeker’s Allowance
- Incapacity Benefit
- Contributory Employment and Support Allowance
- Bereavement Benefits
- State Retirement Pension
- Maternity Allowance
Class 2 – contributions are fixed weekly amounts paid by the self-employed.
Class 2 payment go towards the same benefits as Class 1, except that Class 2 does not usually count towards Jobseeker’s Allowance.
Class 3 -contributions are voluntary
Class 3 payments are made if you wish to fill a gap in contributions caused by low earnings for a period of time.
Class 4 – contributions are paid by self-employed people
Class 4 payments are made by self-employed people and have profits over a certain level
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