​Everything you need to know about National Insurance

Reading this article may not change your life for the better but it will certainly help you understand the purpose of National Insurance and why you need a National Insurance Number (NINO) to work in the UK! By Sarah Milne - updated 29/07/2019

THERE IS NO SUCH THING AS A FAST-TRACKED NI NUMBER. Please be aware that there are a number of websites selling a fast-track appointment for your National Insurance Number. THERE IS NO SUCH THING.

Every company, including ourselves, must use the same appointment booking process. There is only one. So any company telling you they can do your NI appointment for you in a quicker time frame are LYING TO YOU. It is NOT TRUE. DO NOT BE FOOLED!

General National Insurance Information

What exactly is National Insurance?

National Insurance, which is often abbreviated to NI (or NIC, National Insurance Contribution or NINO, National Insurance Number), is money that is paid to Her Majesty's Revenue and Customs (HMRC) by employers, employees, and those who are self-employed. So basically everyone who works in the UK!

Historically, it was a fund that was set up after the Second World War to prevent a return to the poverty levels that existed after the war. Everyone contributed to the fund, which was then used as an insurance scheme to provide benefits for those who could not support themselves.

It still remains a Government Scheme and anyone working in the UK (earning over a set threshold) must pay into the scheme.

UK residents receive a National Insurance Number automatically when they turn 16. But for those newly arrived to the UK to live and work, it’s something you will need to apply for.

A National Insurance Number is like a Tax File Number (for the Australians), or an Inland Revenue Department (IRD number) for the New Zealanders. It is also similar to having a Canadian Social Insurance Number (SIN), while the German equivalent is an ‘Identifikationsnummer'. Every country will have it's equivalent.

What is the National Insurance Number used for?

It is kind of like a tax file number, social security number rolled into one. But what it does is allows the HMRC to track the amount you have contributed in tax and NI and having one will assist you with a tax refund. It also works as a reference/ID number for other departments such as the National Health Service, because it is unique to you.

What does a National Insurance Number look like?

Your NI number will include two letters, six numbers and another letter, so it will take the form AB 123456 C. It used to be sent out on a credit card style piece of plastic but now it is just a piece of paper. I would recommend keeping this piece of paper safe as it can be used whenever you are asked for an official proof of address, like when you are applying for a High Street bank account.

What should I do with my number once I have it?

Once you have received your letter from the HMRC detailing your NI number, you’ll then need to provide a copy to your employer or company’s human resources (HR) department. This will mean that you pay the correct amount of tax and NI whilst you are here.

How long is my National Insurance Number valid for?

Once you apply for and are allocated a National Insurance Number, it’s yours for life. If you leave the UK and return 25 years later, you will still have the same National Insurance Number.

The UK Deed Poll office says that if you change your name via Deed Poll, you cannot change your National Insurance Number.However, you can and should contact HMRC and ask them to update your records in their system, especially in relation to your NI number.

If you lose your NI number or change your address, you should also notify HMRC. Just think, you may be eligible for a tax refund, but if your details are not up-to-date, your tax cheque will never reach you!

You can complete the online form on the HRMC website, or call the National Insurance enquiries helpline on 0300 200 3500 (lines are open 8am to 5pm, Monday to Friday).

Is National Insurance a replacement for Travel Insurance?

No, because National Insurance is essentially just another form of tax. Whilst part of the contribution does go towards funding the NHS, it is really just an additional deduction from your gross earnings that goes to the UK Government.

But it is worth remembering that whilst here that you are covered by the NHS* which means you do not pay to see a doctor or visit a hospital. So unless you specifically want (and can afford) private health insurance you don’t need to do anything to cover yourself medically. Of course I am not privy to your background and there may be reasons why you would need to take out additional healthcare cover.

*assuming that you are here on either an British or EU passport or have a visa that allows you to work or study here for a period of more than six months.

Do I still need to get travel insurance? Yes, because National Insurance is not insurance in the same sense as travel insurance is. Why? Well read through the rest of this article to see why!

Should I also arrange health insurance?

Only you can answer that. But you will not have to pay to see a doctor or go to the hospital under the National Health Service (NHS). But if you have medical reasons that require additional personal health insurance then of course. Do your research. For the average Joe, you will be fine with the NHS as this is the equivalent to your Medicare, or whatever it is called in your country.

Do I need a National Insurance Number to open a bank account?

You can open a bank account without having your NI number, but your options will be limited. Read this article to understand more about opening a bank account. If you want a bank account with a mainstream bank (HSBC, Barclays, Lloyds etc), then you will find having an NI number will make it a lot easier. Once you have your NI number letter then pretty much any UK bank will open an account for you. This is because the letter that confirms your NI number is considered an official document for proof of address. So do not lose this letter!

National Insurance Deductions

How much National Insurance do I have to pay?

If you earn more than £166 a week (this is the figure for the tax year April 6th 2019 - April 5th 2020) then you will have to pay NICs. How much you pay depends on how much you earn.

  • You will pay 12% of your weekly earnings between £166 to £962 (£719 to £4,167 a month)
  • Then you pay 2% of any weekly earnings above £962 a week (£4,167 a month)

As an employee, the money you earn (your salary or hourly wage) is called your gross pay. When deductions from your gross pay such as tax and National Insurance have been taken off, the amount left (and what is paid into your bank account) is called your net pay. You can see what your gross pay was and how much has been deducted on your payslip.

When do I pay National Insurance?

Your NIC, or National Insurance contribution is taken from your gross salary when you are paid. So whilst you are working you will be required to pay NI, unless you do not meet the tax threshold.

Your National Insurance contributions will be deducted along with Income Tax before your employer pays you. On your payslip you will see the deduction for your NIC along with the deduction for Tax. If you are self-employed then you will need to set up a regular payment to the HMRC to cover this requirement.

Is National Insurance essentially another tax?

Good question, and yes it is! Why on earth don’t they just call it a tax then? Because that is essentially what it is! But it is a specific tax that contributes to your pension and it is also the largest funding source for the NHS.

What do National Insurance payments pay for?

Your National Insurance contributions will go towards various state benefits and services, including:

Do I have to pay National Insurance?

If you are aged 16 and over and working in the UK, then yes you must pay National Insurance… providing your earnings are more than the threshold.

If you're employed, NICs will be taken automatically from your monthly pay. If you are registered as self-employed, you’ll have to arrange to pay your NIC yourself.

Will I be taxed more if I start work without a National Insurance Number?

This will depend on the HR department and how they set up your payroll. If the HMRC has insufficient information from your payroll manager then you might be put onto Emergency Tax. You can tell by your tax code whether you are on Emergency Tax -- you might be taxed at a higher rate which you can tell by the code. If you are, then you can get a rebate by contacting HMRC, sometimes this happens automatically once your employer or payroll department has received your NI Number.

I have paid an Immigration Health Surcharge (IHS) fee – do I still have to pay National Insurance?

This really is one of those ‘not fair’ situations and I really think the UK Government has been quite cheeky to introduce the IHS fee. It is certainly not something I really agree with. But the answer is yes, the National Insurance deduction, whilst in part contributing to the NHS, it is not just funding the NHS and therefore you have no option to pay it. Everyone who earns over the threshold has to pay it which means you will too!

Can I get a rebate on my National Insurance Contributions?

Many years ago you were able to redirect a percentage of your NI contributions into your pension or superannuation policy back home. It was only a small amount and the amount that equated to your pension contribution. Which makes sense as if you are on a Tier 5 Youth Mobility Visa then you are not going to be retiring here!

From memory, it was only New Zealanders who could do this and it was through their accountant back home. But I believe this has all stopped. Please write and let me know if this any different. You are however, highly like to be able to claim a Tax Rebate at some point so it is worth reading up on this.

Top Tip: Whilst you will need to apply for a UK National Insurance Number, you can start work before applying for one and while waiting for your application to be processed.

Applying for National Insurance

When can I apply for my National Insurance number?

You cannot apply for your National Insurance number until you have arrived in the UK. However, as a member of BritBound you will be able to pre-complete the required fields for your NI application on your My.BritBound portal and then we’ll get your application underway as soon as you have arrived.

We will also talk you through the NI process when you come along to the Arrival Info Party. So if you do nothing until that point, then its fine, because that is what most people do, just leave it until they get to the BritBound Base.

How do I apply for a National Insurance Number?

Unfortunately, applying for your NI number is rather cumbersome. The biggest pain is the amount of time you will spend trying to get through to them (!), so expect to be on hold for a significant time.

At BritBound, we offer this service as part of your membership, not because you can’t do it yourself, but because it is a pain-in-the-you-know-what to do! We’re here to make your transition stress-free, which is why we will get this organised leaving you to enjoy exploring your new surrounds!

The two most important things to note about applying for your NI number is:

1) You must be in the UK to apply for your NI number

2) You need to have a secure UK address, not a hostel or hotel

What information is required to make an NI appointment?

When arranging appointments we are asked several questions about you, these do change from time to time but always includes:

  1. Name
  2. Date of Birth
  3. Nationality
  4. Visa Type (Tier 5 Youth Mobility, UK Ancestry, etc)
  5. Date you arrived in the UK
  6. A UK Residential address - which cannot be a hotel, hostel, B&B etc.

The NI Appointment Letter will list what you need and yes it does ask for a Proof of Address document. You cannot use a hotel, hostel or temporary lodgings. Remember that the address used for your NI Appointment is the address used for all your HMRC correspondence, including tax refunds. So it is important you have continued access to that address.

At BritBound you can sign up to our Mail Holding and Forwarding service by adding this to one of our Membership Packages, which means you can use our residential address as Proof of Address. You will need to set up your bank account address to be here to as that way you will have an official document with your address on it.

There is no way of selecting an NI appointment date. They fill up appointments one date at a time, so for example when we were calling all the appointments through today, they were booking appointments for the 23rd September. And when we call through tomorrow it will be most likely that the appointments are being booked for the 24th September. Of course this date will be different for different parts of the UK.

Yes, you can start work straightaway. There is no legal requirement for you to have an NI number to work. Life here will be easier with an NI number so we'd recommend it. Your employer can still ensure you pay NI (which is a legal requirement) but they do not need a number for you to do so. So you can absolutely start work whilst you are wait for your appointment or your number is in progless.

What do I have to do to get a National Insurance number?

The first step is making an appointment, as mentioned above, a letter is sent out to confirm the date, time and location of your appointments. All appointments are held at a Job Centre Plus. These are all over the UK, but only in larger towns and cities, so you might have to travel to get to your closest one. At the appointment you have to satisfy who you are so you need to take along your passport or ID card.

How long is the wait for a National Insurance appointment?

This really depends on where you are in the country. In the larger Cities like London you can have a long wait - we've had appointments booked 4 weeks later, though recently the time has shortened a lot, we've recently been getting some appointments for just a few days after our customers arrival date.

At BritBound we will start the process as soon as you arrive (your travel plans allowing, of course). As an average we would say it is around a two week wait for the appointment and then four weeks to eight weeks wait for your number, sometimes longer during the peak arrival period (April through to September).

How long is the appointment?

It's usually very fast, around 10-15 minutes max. Sometimes they fall behind schedule, like the dentists! But you should not be there very long.

What happens at the NI Appointment?

It is basically an identity interview where you will be asked to provide evidence of who you are and your right to be here in the UK.

You will need to take:

  1. Your passport or ID card
  2. Evidence of where you are staying - though do not worry if you do not have this. If you have opened a bank account then you can take along a statement from the bank. We also offer free printing at the BritBound Base.

What happens if I miss my NI Appointment?

Please try not to! In peaks times of the year you can wait up to 4 weeks for an appointment. As I write this, this is the average time it is taking. So if you cancel your appointment you go back to the beginning and have to wait another 4 weeks! So best try and do your upmost to get there!

Can I apply for my National Insurance Number whilst in my home country?

No, you cannot apply for a National Insurance number until you have arrived in the UK. As part of the application you will be required to provide your date of arrival.

If you are a BritBound member then we will start the process once we’ve confirmed your arrival date and made sure that you are going to be present in the UK long enough to complete the process. If you are travelling overseas shortly after arriving then we will usually wait until you return. But we will discuss all of this with you as part of your arrival process.

Is there a fast-track service?

NO, even though many websites claim to offer you a fast-track service it does not exist. These companies are just scamming you so do not be tricked! BritBound can help you by saving you the time trying to work out how to do it, and we can provide you a secure address but there is no such thing as a priority service. I repeat, there is NO SUCH THING AS A FAST-TRACKED NATIONAL INSURANCE NUMBER.

Please share this amongst everyone you know - because these companies are taking peoples money and telling them they will fast-track their application. IT IS A RIP OFF! DO NOT BE FOOLED - EVERYONE HAS TO USE THE SAME APPOINTMENT BOOKING SYSTEM!

Do I need to have a secure address to apply?

Yes, regardless of the passport or visa you are travelling on, you will need an address where your NI number application and NI number itself can be sent. The important thing to remember is that the address used for your NI application is going to become the default mailing address for any correspondence from the HMRC. This can include tax returns too! So don’t use a random address or a temporary one because you might easily miss out on a lovely, juicy tax return cheque!

If you are a BritBound member then you can choose to use our address as your secure address for mail. A small admin fee applies (£20 for two months) but it will cover you for your first two months or longer. And we will always tell you when mail has arrived, even after your two months has expired, so you won't miss your tax refund cheque.

If you want to join BritBound and access our secure UK address option, click here.

I have been to my NI Interview but still have not received my NI number - what can I do?

I would say, based on my experience at BritBound, give it up to 8 weeks after your appointment and then contact them to say you have not heard anything. You do not legally require a National Insurance number, so if your employer is hounding you for it then perhaps direct them to this article!

If I leave the UK and return later, will I need to apply again?

No, once you have a National Insurance number, you have it for life. You National Insurance number will never expire. So if you return home then come back to the UK in 10 years’ time, that number would still be valid. You would not need to apply again.

How can I change my address?

If you need to change your address then you need to call 0300 2000 532. I would advise against doing this mid application. It is important that you use an address that you can access your mail for the entire time you are in the UK. The HMRC will use the address provided for your NI appointment for all correspondence concerning your tax affairs whilst in the UK< including a tax refund, if applicable.

I have lost my NI number, how can I find out what my NI number is?

If you lose your NI number, you should notify HMRC. You can complete the online form on the HRMC website, or call the National Insurance enquiries helpline on 0300 200 3500 (lines are open 8am to 5pm, Monday to Friday).

Employer Related

Can I start work without a National Insurance Number?

Yes, absolutely. Most employers understand that organising a NI number for the first time is a process and will take a few weeks. Be aware though that not all employers are familiar with employing someone who has headed here from overseas to work.

Larger HR departments will be more clued up but smaller employers might be less familiar with the on-boarding process. If you are met with any employer who tells you they cannot employ you without an NI number, this is incorrect and they need to be educated on the British tax system!

"Most employers understand that organising a NI number for the first time is a process and will take a few weeks. Be aware though that not all employers are familiar with employing someone who has headed here from overseas to work.

Can my employer pay me without a National Insurance Number?

Yes, your employer can pay you without a National Insurance Number -- but you will pay a higher rate of tax as you won't be on a code that applies the tax-free threshold. It is your responsibility to apply for an NI number. Your workplace will need to process your code using an emergency tax code until you have been issued with an NI number from from HMRC.

How can I reassure employers that they can employ me without a National Insurance number?

The answer would probably be to refer them to the HMRC employers line which will reassure them that you can start work without an NI Number. When you start working in the UK for the first time your employer will ask you to complete a Starter Checklist.

There is a field which asks whether or not you have an NI number, so here they should see that it is possible to register your details with the HMRC and be able to say you do not have a number.

If you do not have an NI number your tax code will probably be an emergency tax code. This means you won't initially have the benefit of the tax free threshold but once you provide your employer with your NI then any overpaid tax will be refunded to you in your next pay cheque.

Most employers understand that organising a NI number for the first time is a process and will take a few weeks. Be aware though that not all employers are familiar with employing someone who has headed here from overseas to work.

Larger HR departments will be more clued up but smaller employers might be less familiar with the on-boarding process. If you are met with any employer who tells you they cannot employ you without an NI number, this is incorrect and they need to be educated on the British tax system! The beauty about BritBound is that if you run into trouble, there is always someone on hand who can help you.

How long can I work without an NI number?

You could work your entire time here in the UK without an NI number because it is not a legal requirement. Paying NI however is. Unless you are self-employed, you are going to find that the majority of employers here will ask you to provide a National Insurance number as soon as possible. This is often because many payroll systems have been built making the NI field mandatory. So they will need it to pay you.

Is it illegal to work without an NI number?

The NI number is not technically an HMRC requirement so therefore it is not illegal. But paying NI is compulsory and so it is worthwhile and easier to apply for an NI number. Having an NI number will ensure you are on the correct tax code, pay the right tax and are able to apply for a tax refund at the year end, should you be owed one.

I am only in the UK for a few months, do I still need an NI number?

I cannot find any official line on this but I can tell you that we recently had a customer who was only in the UK for 3 months and when we made her appointment and mentioned this, they refused her an appointment. I am not sure they can do this but it definitely happened and the lady on the phone said they won't make appointments unless you are here for longer than 3 months. Like I said, I cannot find an official stance on this but do send the link to me if you find one!

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