What is National Insurance?
National Insurance (NI) is a system in the UK that requires most people who work and earn money to pay contributions. Here’s what you need to know:
- Who Pays? Almost everyone who is in paid work must pay National Insurance Contributions (NICs). This includes self-employed people.
- What is It Used For? The money collected from these contributions goes towards important services like:
- The state retirement pension (money you receive when you stop working).
- The National Health Service (NHS), which provides healthcare.
- How is it Paid?
- If you are an employee, your employer will deduct your NICs from your salary before you get paid.
- If you are self-employed, you need to pay your own contributions.
Why is National Insurance Important?
If you do not pay enough National Insurance, you may not qualify for certain benefits, such as:
- Jobseeker’s Allowance (help when you are looking for work).
- A full state retirement pension (the money you receive when you retire).
Getting a National Insurance Number
A National Insurance number is a special number that helps keep track of your contributions. Here are some key points:
- Who Gets One? All young people in the UK receive a National Insurance number just before their 16th birthday.
- If You Are Not From the UK: If you are a non-UK national and want to work in the UK, you will need to get a National Insurance number. You can start working without one, but you should apply for it soon after starting.
- How to Apply: If you have permission to work in the UK, you can contact the Department for Work and Pensions (DWP) to apply. You might need to attend an interview and bring documents that show your identity and permission to work.
Key Rules to Remember
- You must pay National Insurance if you are earning money from a job.
- Not paying enough contributions can affect your benefits.
- Your National Insurance number helps keep track of your contributions.
Questions for Students
Easy Level Questions
- Who must pay National Insurance Contributions?
- A) Only self-employed people
- B) Almost everyone in paid work
- C) Only government employees
- D) Students only
- What is one purpose of National Insurance Contributions?
- A) To pay for cars
- B) To pay for the NHS
- C) To pay for schools
- D) To pay for entertainment
- How do employees pay their National Insurance Contributions?
- A) They pay it directly to the bank
- B) Their employer deducts it from their pay
- C) They do not pay at all
- D) They pay it once a year
- What happens if you do not pay enough National Insurance?
- A) You cannot drive a car
- B) You may not receive certain benefits
- C) You will be fined
- D) You cannot work
- When do young people in the UK receive their National Insurance number?
- A) At birth
- B) Before their 16th birthday
- C) When they start college
- D) When they start working
- Can a non-UK national start working in the UK without a National Insurance number?
- A) Yes, but they need to apply for it later
- B) No, they must have it first
- C) Yes, they can work without any number
- D) No, they cannot work
- What is the main website for getting information about National Insurance?
- A) www.nhs.uk
- B) www.hmrc.gov.uk
- C) www.gov.uk
- D) www.uk.gov
- What is a benefit of having a National Insurance number?
- A) It helps you get a driving license
- B) It helps track your contributions
- C) It allows you to travel abroad
- D) It gives you a bank account
- Who can help you apply for a National Insurance number?
- A) Your employer
- B) The Department for Work and Pensions (DWP)
- C) Your family
- D) The police
- What might you need to bring to an interview for a National Insurance number?
- A) A passport and proof of address
- B) A school report
- C) A birth certificate only
- D) A letter from your friend
Medium Level Questions
- What happens if you have not paid enough National Insurance Contributions?
- A) You will get a tax refund
- B) You may not get a full state pension
- C) You will not be able to work
- D) You will receive a job offer
- How are self-employed people required to pay National Insurance?
- A) They do not pay
- B) They pay through their employer
- C) They pay directly to the government
- D) They pay monthly
- What is the purpose of National Insurance Contributions?
- A) To fund private schools
- B) To support social services and benefits
- C) To pay for luxury items
- D) To support the stock market
- When can you apply for a National Insurance number if you are a non-UK national?
- A) Only after you have worked for one year
- B) When you want to look for work or start your own business
- C) Only when you are 18
- D) You cannot apply
- What is one benefit that requires enough National Insurance Contributions?
- A) Free meals
- B) Jobseeker’s Allowance
- C) Paid holidays
- D) Car insurance
- If you are part-time and do not earn enough, what could you miss out on?
- A) Maternity pay
- B) A discount on shopping
- C) A free gym membership
- D) A job promotion
- What is the role of the HMRC regarding National Insurance?
- A) To collect taxes only
- B) To manage the NHS
- C) To provide guidance on National Insurance
- D) To create laws
- How do National Insurance Contributions affect the NHS?
- A) They do not affect it at all
- B) They help fund the NHS services
- C) They only pay for private hospitals
- D) They reduce NHS services
- What does a National Insurance number NOT prove?
- A) Your contributions
- B) Your identity
- C) Your right to work
- D) Your age
- What might you need to show at the DWP when applying for a National Insurance number?
- A) Your school grades
- B) Proof of identity and permission to work
- C) Your bank statements
- D) Your travel history
Hard Level Questions
- If you are self-employed, how often must you pay National Insurance Contributions?
- A) Every week
- B) Annually
- C) Monthly
- D) It varies depending on income
- What type of National Insurance is required for employees?
- A) Class 1 National Insurance
- B) Class 2 National Insurance
- C) Class 3 National Insurance
- D) Class 4 National Insurance
- What is the maximum age you can receive a state retirement pension?
- A) 60 years
- B) 65 years
- C) There is no maximum age
- D) 70 years
- How does the government use the money raised from National Insurance Contributions?
- A) To fund private companies
- B) To pay for state benefits and services
- C) To invest in the stock market
- D) To pay for international aid
- What are Class 2 National Insurance Contributions meant for?
- A) Employees with high income
- B) Self-employed individuals
- C) Only part-time workers
- D) Students only
- If you are under 16, will you receive a National Insurance number?
- A) Yes, at any age
- B) No, only before 16
- C) Yes, at 15 years
- D) No, after you turn 16
- How long can you work in the UK without a National Insurance number?
- A) You cannot work without one
- B) For a maximum of six months
- C) Until you find a job
- D) Indefinitely
- What does it mean if you have gaps in your National Insurance Contributions?
- A) You may not qualify for full benefits
- B) You will receive a bonus
- C) You can work less
- D) It has no effect
- What happens if you have a National Insurance number but have not paid contributions?
- A) You can still receive all benefits
- B) You may miss out on some benefits
- C) You will get a tax refund
- D) You will be fined
- Why is it important to keep your National Insurance Contributions up to date?
- A) To avoid penalties
- B) To ensure you qualify for benefits
- C) To improve your credit score
- D) To gain employment
Answers and Explanations
Easy Level Answers
- B – Almost everyone in paid work
- B – To pay for the NHS
- B – Their employer deducts it from their pay
- B – You may not receive certain benefits
- B – Before their 16th birthday
- A – Yes, but they need to apply for it later
- B – www.hmrc.gov.uk
- B – It helps track your contributions
- B – The Department for Work and Pensions (DWP)
- A – A passport and proof of address
Medium Level Answers
- B – You may not get a full state pension
- C – They pay directly to the government
- B – To support social services and benefits
- B – When you want to look for work or start your own business
- B – Jobseeker’s Allowance
- A – Maternity pay
- C – To provide guidance on National Insurance
- B – They help fund the NHS services
- C – Your right to work
- B – Proof of identity and permission to work
Hard Level Answers
- D – It varies depending on income
- A – Class 1 National Insurance
- C – There is no maximum age
- B – To pay for state benefits and services
- B – Self-employed individuals
- B – No, only before 16
- A – You cannot work without one
- A – You may not qualify for full benefits
- B – You may miss out on some benefits
- B – To ensure you qualify for benefits
