Glossary · Tax
National Insurance (NI)
Last reviewed:
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. The qualifying years built up determine your State Pension entitlement (35 years for the full new State Pension). Voluntary Class 3 contributions can fill gaps.
Primary source: gov.uk/national-insurance