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Glossary · Tax

National Insurance (NI)

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By the Money Guide editorial team · Editorial responsibility: Kaiser Khan, Editorial Director · How we check facts

Definition: A UK tax that funds the State Pension and certain benefits. Class 1 is paid by employees (8%/2%); Class 4 by the self-employed (6%/2%); Class 2 is effectively voluntary since April 2024.

Employees pay 8% on earnings £12,570–£50,270 and 2% above. You normally need at least 10 qualifying National Insurance years for any new State Pension. The 35-year rule for the full amount applies if your NI record started after April 2016; earlier records use transitional rules, including any contracted-out history. Check your personal forecast.

Primary source: gov.uk/national-insurance

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