Most people who work have to pay contributions for National Insurance.

National Insurance contributions are related to what you earn. That means that you pay a certain percentage of your wage.

The contributions are paid to the National Insurance fund and build up your entitlement to certain benefits.

There are six different classes of contributions to the NI. Some classes count towards certain benefits - so you need to know which class you should contribute to.

National Insurance contributions in general cover Job Seeker's Allowance, Incapacity Benefit, Retirement Pensions, Bereavement Benefits and Maternity Allowance.

How National Insurance is collected

• If you are an employee, National Insurance is deducted from your wages before you receive your pay packet.

• If you self-employed you can pay Class 2 National Insurance contributions either by monthly direct debit or quarterly bill. Class 4 contributions are calculated as part of your self-assessment return and you pay them along with your Income Tax. See Income Tax for our information on Self-Assessment.

More information on National Insurance can be found on the HMRC web site.

Your National Insurance number
Usually every citizen of the UK receives a National Insurance number when they turn 16. You keep this number for a lifetime.

If for some reason you didn't receive the number automatically you have to apply for one. You should contact the nearest office of the Department for Work and Pensions to arrange an appointment for an interview. In this interview you have to prove your identity.

If you work you always need to have a National Insurance Number. It is your account number for all dealings with the HM Revenue & Customs and Department for Work and Pensions.

When you start working you should tell your employer your National Insurance number right away. This is important because if your employer allocates your contributions to the wrong account you might have problems with claiming benefits later on.