People with full- or part-time jobs who are paid by companies, and whose income tax is deducted from their pay, also have a National Insurance (NI) payment deducted as well.

NI, separate from income tax, pays specifically for the NHS and unemployment benefits for yourself if you become unemployed, and if you have not paid NI your benefits could be considerably lower if you ever need to claim them.

Most self-employed people will need to pay Class 2 NI payments, either monthly by direct debit or quarterly if you cannot pay on direct debit.  These are not voluntary payments and it is illegal not to pay them.

If your earnings are very low, or very high, you may need to pay a different level of NI, and information about NI contributions is at the HMRC website. If you will be earning less than the relevant threshold (in 2011-12 less than £5,315 a year) you can ask to be exempt from paying Class 2 NI contributions.

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