April 2024

What Happens If I Don’t Pay National Insurance In April 2024

Those who reside and work in the United Kingdom are likely familiar with National Insurance contributions.

These contributions are a form of tax contributing to funding various social security benefits and entitlements, such as the state pension.

If your income exceeds a certain threshold, you start paying National Insurance, and contributions are required by law. However, what are the consequences of not paying National Insurance?

This article examines the repercussions of not paying National Insurance contributions, how the government knows you haven’t paid, and the methods for paying National Insurance.

You can listen to an audio recording of this page below.

What is National Insurance?

National Insurance is a system of taxes paid by employees and employers in the United Kingdom to finance various social security benefits and entitlements.

These include the UK state pension, the contributory employment and support allowance, and the maternity allowance. National Insurance contributions are typically deducted from an employee’s earnings.

You must make separate arrangements to pay your National Insurance contributions if you are self-employed people part-employed.

Who has to Pay National Insurance?

If you are an employee earning over a certain amount per week, you must pay National Insurance contributions. If you earn over £184 per week in 2023, you must pay National Insurance.

You must pay National Insurance contributions if you are self-employed and earn more than £6,515 per year.

It is essential to note that you must begin paying National Insurance contributions as soon as you begin working and continue doing so until you reach the age of eligibility for the state pension.

What Happens If I Don’t Pay National Insurance Self-Employed?

If you are self-employed and do not pay National Insurance (NI) contributions, there are several potential consequences:

1. State Pension: Your National Insurance record determines if you are eligible for the State Pension. To get the full UK State Pension, you need to have worked a certain number of years. If you don’t pay National Insurance (NI) contributions, you might not get enough qualified years, which could lower your State Pension amountor keep you from getting it at all.

2. Benefits: Jobseeker’s Allowance, Employment and Support Allowance, and Maternity Allowance are just some of the benefits that depend on a certain National Insurance record. If you don’t pay your NI contributions, you might not be able to get these perks.

3. Penalties: If you are supposed to pay National Insurance but don’t, you could get fines, interest, or both. This can make the amount you owe go up by a lot.

4. Debt Collection: HM Revenue & Customs (HMRC) can take steps to collect the debt, such as taking money straight from your bank or building society account or selling things you own.

5. Class 2 and Class 4 National Insurance: If you work for yourself, you might have to pay both Class 2 and Class 4 NI. The payments you make to Class 2 are especially important because they count towards your State Pension and other benefits.

6. Volunteer Contributions: If you find gaps in your NI record, you can make volunteer contributions to fill them, but there are time limits and other conditions to think about.

What Happens If I Don’t Earn Enough To Pay National Insurance?

In the UK, you don’t have to pay National Insurance Contributions (NICs) if you don’t make more than the Lower Earnings Limit (LEL). If you earn between the LEL and the Primary Threshold, you won’t pay NICs, but you’ll still get National Insurance points, which count towards your State Pension and some other benefits.

I Don’t Earn Enough To pay National Insurance, Will I Get A Pension?

If you make less than the LEL, you won’t get these points on their own. It’s important to know this, because if you don’t get enough National Insurance points or contributions, it could affect your future eligibility for the State Pension and other benefits. If there are gaps in your National Insurance record that worry you, you can make voluntary payments.

Consequences of Not Paying National Insurance

If you do not pay National Insurance contributions, you will not be eligible for certain government-provided benefits and entitlements.

This includes the state pension, based on the years of qualifying National Insurance payments.

35 years of eligibility are required to receive the maximum state pension. If your National Insurance contributions are insufficient to reach state pension age, you may not be eligible for the entire state pension or any state pension.

Can I Stop Paying National Insurance After 35 Years?

Most of the time, you need 35 years of National Insurance payments or credits to get the full amount of the new State Pension. If you’ve paid into the State Pension for 35 years, you’ll be able to get the full amount when you hit State Pension age.

If you continue to work after 35 qualifying years, you will usually still have to pay National Insurance contributions until you reach the age for the State Pension, unless you make less than the earnings level.

I Have Never Paid National Insurance, Will I Get A Pension?

Your National Insurance (NI) record shows if you are eligible for the full State Pension.

1. Qualifying Years: To get any amount of the new State Pension, you usually need at least 10 qualifying years of National Insurance on your record. This doesn’t have to be 10 years in a row.

2. Full Pension Amount: To get the full amount of the new State Pension, you need 35 years of National Insurance credits or payments.

3. You haven’t paid into National Insurance. If you’ve never paid into National Insurance, you might not be able to get the State Pension. But you could have NI points without knowing it if you did things like get certain benefits, take care of children, or be a carer.

4. Voluntary payments: If you don’t have enough qualifying years for the full pension, you can consider making voluntary National Insurance payments to boost your record, as long as you meet the requirements for doing so.

5. Pension Credit: If you don’t qualify for the State Pension or only get a small amount, you might be able to get other benefits, like Pension Credit, which can add to your income in retirement.

Checking your National Insurance record is important because it will show you how many qualifying years you have and if there are any breaks.

How the Government Knows You Haven’t Paid

The British government monitors National Insurance contributions using the National Insurance number system. Your National Insurance number is used to monitor your contributions and is unique to you.

The government will know what happens if I don’t pay national insurance contributions if you do not pay your National Insurance contributions because my contributions record will indicate a cavity.

This lacuna indicates that you have not contributed to the National Insurance Fund during that period.

HMRC Records and Contributions Statement

The government agency responsible for collecting National Insurance contributions is HM Revenue & Customs (HMRC).

They maintain records of all National Insurance contributions made by individuals and provide a statement of contributions detailing the amount of National Insurance paid during the tax year.

You can request a copy of your contributions statement to review your contributions history.

Self-Assessment Tax Return

You must file a Self Assessment tax return to report your income and pay your National Insurance contributions if you are self-employed.

The Self Assessment tax return is an annual form that must be completed and submitted to HMRC. You must pay both your National Insurance contributions and your income tax at the same time.

Interaction with other Benefits and Entitlements

Failing to pay National Insurance contributions can also affect other benefits and entitlements eligibility.

You may not be eligible for certain benefits, such as jobseeker’s allowance, maternity allowance, and contributory employment and support allowance, if you do not have sufficient National Insurance contributions.

The quantity of National Insurance contributions you have paid may also impact your eligibility for other benefits, such as the working tax credit.

Penalties for Not Paying National Insurance

Not paying National Insurance contributions carries penalties. Failure to pay your National Insurance contributions on time may incur interest charges and penalties for underpayment or nonpayment.

The penalty amount depends on the amount you owe and your payment’s lateness. If you fail to pay your National Insurance contributions, you may be ineligible for certain benefits and entitlements.

Financial Penalties for Underpayment or Non-Payment of NI Contributions

If you fail to pay your National Insurance contributions on time, you may be subject to interest and fines.

After 30 days, the late payment penalty for National Insurance contributions is typically 5% of the unpaid amount and another 5% after six months. After 12 months, you may be charged an additional 5% penalty if you have not paid.

Disqualification from Receiving Certain Benefits or Entitlements

If you fail to pay your National Insurance contributions, you may not be eligible for certain benefits or entitlements.

For instance, you may not be eligible for unemployment benefits, maternity benefits, or contributory employment and support allowance.

The quantity of National Insurance contributions you have paid may also impact your eligibility for other benefits, such as the working tax credit.

Impact on Pension Entitlement

Failure to pay National Insurance contributions can significantly impact your pension. Your eligibility for a state pension is determined by the number of qualifying years of National Insurance contributions.

If your National Insurance contributions are insufficient, you may not be eligible for the entire state pension or any state pension.

You may also need to rely on private pensions or savings to pay for your social care expenses.

"National Insurance is a system of taxes paid by employees and employers in the United Kingdom to finance various social security benefits and entitlements."

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Criminal Prosecution for Deliberate Non-Payment of National Insurance Contributions

You could face criminal charges if you intentionally fail to pay your National Insurance contributions. This can lead to a fine, jail time, or both.

You must pay your National Insurance contributions on time, as the British government takes late payments very seriously.

Ways to Pay National Insurance

There are multiple methods to make National Insurance payments. Your employer will deduct your National Insurance contributions from your earnings and pay them on your behalf if you are employed.

Self-employed individuals are responsible for paying their own National Insurance contributions. You can pay National Insurance contributions via direct debit or standing order and through one-time and retroactive payments.

Direct Debits and Standing Orders

Direct debit and standing orders are convenient methods for making National Insurance payments. You can set up a direct debit or standing order to pay your monthly contributions each month automatically.

This ensures you never neglect a national insurance payment and helps you calculate for your contributions.

One-off Payments and Retrospective Payments

If you have neglected a payment or wish to make a one-time payment, you can submit a check or make a bank transfer.

You can also make payments retroactively to make up for neglected contributions from prior years.

Voluntary Contributions and Other Options if You Have Missed Contribution Deadlines

If you have missed a payment deadline for National Insurance contributions, you may still be able to make voluntary contributions to make up the difference.

You may make and pay voluntary or Class 3 contributions to cover voids in your National Insurance record within six years of the end of the tax year for which the contributions were due.

Making Voluntary Class 3 Contributions

You could make voluntary Class 3 contributions to remedy voids in your National Insurance record if you missed pay class of contribution deadlines.

The cost of voluntary Class 3 contributions varies by tax year.

Making Arrangements with HMRC to Make Up Your Deficit in Contributions

If your National Insurance contributions are insufficient, you can make arrangements with HMRC to make the difference.

This involves paying the delayed contributions over time in instalments. You can arrange with HMRC by using their online services or contacting them directly.

Reclaiming Missed Pension Entitlements

You may be able to claim benefits or reclaim pension benefits for which you were ineligible due to insufficient National Insurance contributions.

You can contribute voluntarily to Class 3 to cover the shortfall. Self-employed women who have paid sufficient National Insurance contributions are also eligible for maternity allowance and statutory maternity pay.

Claiming Maternity Allowance if You’re Self-Employed

If you are self-employed and have made sufficient contributions to National Insurance, you may be eligible for maternity allowance or statutory maternity pay.

A maternity allowance is a payment made to pregnant women not qualifying for statutory maternity pay. Statutory maternity pay is a benefit paid monthly to eligible workers who take leave to have a child.

Contributions to National Insurance are obligatory for those who reside and work in the United Kingdom.

Nonpayment of National Insurance contributions can have severe repercussions, including a reduction in eligibility for the state pension and other benefits.

Several options are available if you have neglected a payment or wish to make voluntary contributions to offset a shortfall.

By paying your National Insurance contributions on time, you can ensure that you are eligible for all government-provided benefits and entitlements.

Do I have to pay National Insurance?

Do you have to pay national insurance? Yes, National Insurance contributions are required to qualify for the state pension, contributory benefits, and social security benefits in the United Kingdom.

Your National Insurance contributions also fund the public services and healthcare system of the United Kingdom.

It is essential to keep account of your National Insurance contributions and ensure that you have paid enough to qualify for future benefits, such as retirement.

Does a National Insurance number prove the right to work in the UK?

No, a National Insurance number does not prove employment eligibility in the United Kingdom. To pay National Insurance contributions and be eligible for certain benefits and entitlements, you will need a National Insurance number if you are eligible to work in the UK.

If you are 16 or older and eligible to work or study in the United Kingdom, you can register for a National Insurance number.

What is the basic state pension in the UK?

The basic state pension in the United Kingdom is a regular government payment made to eligible individuals over 66 (for those born on or after April 6, 1951) or over the state pension age (for those born before April 6, 1951).

As of April 2021, the entire new state pension is £179.60 per week, although the quantity you receive may vary based on your National Insurance record and other factors.

How much savings can a pensioner have in the UK bank?

In the United Kingdom, there is no limit on how much savings a pensioner can have. Still, the amount of savings and income you have may affect your eligibility for certain benefits and entitlements.

For instance, if your savings exceed a specific limit, you may not qualify for means-tested benefits such as Pension Credit.

It is crucial to consider your unique circumstances and seek advice to determine how your savings and income may impact your eligibility for benefits and entitlements.

What does National Insurance pay for in the UK?

The National Health Service (NHS), social security benefits, and the state pension in the United Kingdom are partly financed by National Insurance contributions.

They also contribute to the social care system in the United Kingdom and can be used to pay for certain care costs if you require them in the future.

Your National Insurance contributions also assist those who may require government assistance during economic hardship.

What is a good age to retire in the UK?

The age at which you decide to retire in the United Kingdom is determined by your personal circumstances and financial standing.

Even though the state pension age for those born on or after April 6, 1951, is 66, you may choose to retire earlier or later based on your personal objectives and financial situation.

It is essential to plan for retirement, considering factors such as pension entitlements, savings, and investments, to ensure you have sufficient income to live adequately in your later years.

How much pension do you need to live comfortably in the UK?

The pension you need to live comfortably in the United Kingdom will depend on your circumstances, lifestyle, accommodation costs, and medical or care expenses.

According to experts, a pension income of approximately two-thirds of your pre-retirement income may be sufficient for a comfortable retirement, but this will depend on your individual circumstances.

It is essential to plan and evaluate your financial situation to ensure that you have sufficient income to satisfy your requirements in retirement.

Working part-time, not paying national insurance?

If you earn over a certain threshold while working part-time in the United Kingdom, you may still be required to pay National Insurance contributions.

Currently, the lower limit for National Insurance contributions is £120 per week.

What does national insurance pay for?

Why do we pay national insurance? Contributions to National Insurance help sustain the National Health Service (NHS), state pension, and other social security benefits in the United Kingdom.

This includes the Jobseeker’s Allowance, the Employment and Support Allowance, the Maternity Allowance, and the Bereavement Support Payment.

What are National Insurance Credits?

National Insurance Credits are a type of contribution that can be used to close voids in your National Insurance record.

These credits may be awarded to individuals unable to work, such as those who are unemployed, disabled, or providing care for another individual.

National Insurance Credits are also available to those receiving certain benefits, such as jobseeker’s allowance or incapacity benefit.

National Insurance Credits are intended to prevent individuals from having voids in their National Insurance record, which could affect their eligibility for future social security benefits and entitlements.

Can I Pay Voluntary National Insurance Contributions?

Indeed, you can pay voluntary National Insurance contributions if you wish to increase your National Insurance record or fill in any spaces.

This is especially helpful if you have neglected National Insurance payments or have not worked for an extended period.

Individuals who have attained the state pension age and desire to increase their state pension entitlement can also pay National Insurance contributions voluntarily.

However, it is important to note that voluntary National Insurance contributions may not always be the best option. You should seek professional advice to determine their appropriateness for your particular circumstances.

What are the National Insurance Rates?

National Insurance premiums vary based on the National Insurance class to which you belong.

There are various classes of National Insurance, including Class 1 for employees, Class 2 for self-employed individuals, and Class 3 for voluntary contributions.

National Insurance premiums are also determined by your income and pay period. For example, the current rate for Class 1 National Insurance contributions for employees is 12% on weekly earnings between £184 and £967 and 2% on earnings above £967.

If your profits exceed the minimum threshold, the current rate for Class 2 National Insurance contributions for self-employed individuals is £3.05 per week.

Can Employers Pay National Insurance Contributions?

Employers in the United Kingdom must contribute to National Insurance on behalf of their employees.

Employers deduct employee National Insurance contributions from wages and pay them to HM Revenue and Customs (HMRC) in addition to their employer National Insurance contributions.

Employers pay National Insurance contributions based on their employees’ National Insurance classification and earnings.

Meet the author

Jane Parkinson

Jane is one of our primary content writers and specialises in elder care. She has a degree in English language and literature from Manchester University and has been writing and reviewing products for a number of years.

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Frequently Asked Questions

How do I know if I need to pay National Insurance contributions in the UK?

If you are an employee earning more than £184 per week in 2023 or self-employed and earning more than £6,515 per year, you must pay National Insurance contributions. You should begin making contributions as soon as you begin working and continue doing so until you attain the state pension eligibility age.

What happens if I don’t pay my National Insurance contributions on time?

You may be subject to interest and penalties if you fail to pay your National Insurance contributions on time. After 30 days, the typical late payment penalty is 5% of the unpaid amount, followed by an additional 5% after six months. If you have not paid after 12 months, you may be charged an additional 5% penalty. Failure to pay may also result in losing certain benefits and entitlements, such as jobseekers and maternity allowance.

How can I pay my National Insurance contributions in the UK?

There are numerous methods to pay National Insurance contributions, including direct debit or standing order, check or bank transfer for one-time or retroactive payments, and voluntary contributions for missed contribution deadlines. If you are an employee, your employer will deduct your National Insurance contributions from your earnings, whereas self-employed people are responsible for paying their contributions.

Can I reclaim missed pension entitlements if I have not paid enough National Insurance contributions?

If you are ineligible for the state pension due to insufficient National Insurance contributions, you can reclaim lost pension benefits by making voluntary Class 3 contributions to cover the shortfall. In addition, self-employed women who have made enough National Insurance contributions are eligible for maternity allowance and statutory maternity pay. Monitoring your National Insurance contributions and ensuring you have paid enough to be eligible for future benefits is essential.