National Insurance (Ni) Definition
National Insurance is a system of taxes and contributions in the United Kingdom that provides certain benefits to citizens. The contributions are made by employees, employers, and the self-employed, while the benefits are paid to those who are retired, unemployed, or sick. The National Insurance system is financed by general taxation and National Insurance contributions.
National Insurance contributions are used to fund several different social security benefits, including the State Pension, Industrial Injuries Disablement Benefit, Bereavement Support Payment, Carer’s Allowance, Jobseeker’s Allowance, Employment and Support Allowance, and Maternity Allowance. Employees and employers both pay National Insurance contributions. The self-employed pay a slightly different rate of National Insurance.
In order to qualify for most social security benefits in the United Kingdom, you must have paid a certain amount of National Insurance contributions. The amount you need to have paid depends on the benefit you are claiming. For example, you need to have paid at least 10 years of National Insurance contributions in order to qualify for the State Pension.
