​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 07/07/2019

Quicklinks

  1. General National Insurance Information
    1. What exactly is National Insurance?
    2. What is the National Insurance Number used for?
    3. What does a National Insurance Number look like?
    4. What should I do with my number once I have it?
    5. How long is my NI Number valid for?
    6. Is National Insurance a replacement for Travel Insurance?
    7. Do I still need to get travel insurance?
    8. Should I also organise health insurance?
    9. Do I need a National Insurance Number for a bank account?
  2. National Insurance Payments
    1. How much does NI cost?
    2. When do I pay National Insurance?
    3. Is National Insurance essentially another tax?
    4. What do National Insurance payments pay for?
    5. Do I have to pay National Insurance?
    6. Will I be taxed more if I start work without a National Insurance Number?
    7. I have paid an Immigration Health Surcharge (IHS) fee – do I still have to pay National Insurance?
    8. Can I get a rebate on my National Insurance Contributions?
  3. Applying for National Insurance
    1. When can I apply for my National Insurance number?
    2. How do I apply for a National Insurance Number?
    3. Is there a fast-track service?
    4. How long will my National Insurance number take?
    5. Do I need to have a secure address to apply?
    6. What happens at the NI Appointment?
    7. What happens if I miss my NI Appointment?
    8. If I leave the UK and return later, will I need to apply again?
    9. When do I get my National Insurance Number?
    10. How can I change my address with the HMRC?
    11. I have lost my NI number, how can I find out what my NI number is?
    12. I have been to my NI Interview but still have not received my NI number - what can I do?
  4. Employer Related
    1. Can I start work without a National Insurance Number?
    2. Can my employer pay me without a National Insurance Number?
    3. How can I reassure employers that they can employ me without a National Insurance number?
    4. How long can I work without an NI number?
    5. Is it illegal to work without an NI number?


    General National Insurance Information

    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 among us), 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 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.

    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 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 this document in full to see why!

    Should I also organise 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 for a bank account?

    You can open a bank account without having your NI number, but your options will be limited if you want a bank account with a mainstream bank (HSBC, Barclays, Lloyds etc). Once you have your NI number 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.

    National Insurance Payments

    How much does NI cost?

    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!

    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.

    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.

    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. You firstly need to have a phone plan to allow you to call the HMRC, then you need 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!

    Is there a fast-track service?

    No, even though 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, but there is no such thing as an expedited service.

    How long will my National Insurance number take?

    This really depends on what process you follow. The application procedure differs depending on what nationality you are, what passport you enter on and whether you are here on a visa. 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 takes four weeks and up to eight during the peak arrival period (April through to September).

    Do I need to have a secure address to apply?

    Yes, regardless of the passport 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.

    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.

    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!

    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.

    When do I get my National Insurance Number?

    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 evidence of your date of arrival. But you also need to call the HMRC number, which you cannot dial outside of the UK.

    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.

    How can I change my address?

    If you need to change your address then you need to call 0300 2000 532.

    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).

    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 6 weeks after your appointment and then contact them to say you have not heard anything.

    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.