National Insurance Company

National Insurance Company Definition

Source(Google.com.pk)
National Insurance (NI) in the United Kingdom is a system of contributions paid by workers and employers towards the cost of certain state benefits. It was initially a contributory system of insurance against illness and unemployment, and later also provided retirement pensions and other benefits. It was first introduced by the National Insurance Act 1911, expanded by the Labour government in 1948 and has been subject to numerous amendments in subsequent years.
The contributions component of the system, "National Insurance Contributions" (NICs), paid by employees and employers on earnings, and by employers on certain benefits-in-kind provided to employees. The self-employed contribute partly by a fixed, weekly or monthly payment, and partly on a percentage of net profits above a certain threshold. Individuals may also make voluntary contributions, in order to fill a gap in their contributions record and thus protect their entitlement to benefits. Contributions are collected by HM Revenue and Customs (HMRC) through the PAYE system, along with Income Tax and repayments of Student Loans.
The benefit component comprises a number of contributory benefits of availability and amount determined by the claimant's contribution record and circumstances. Weekly income benefits and some lump-sum benefits to participants upon death, retirement, unemployment, maternity and disability are provided.
£ billions 2012/2013 Spending 2012/2013 Resources
Retirement Pensions (including Christmas bonus) 79.321
Widows/Berevement Pensions 0.571
Incapacity 2.591
Unemployment benefit & support 3.463
Maternity & Guardians allowance 0.373
Administrative costs & Transfers 4.693
Total 91.012 84.263
Recent developments of the system have meant that National Insurance provides a significant part of the government's revenue (21.5% of the total collected by HMRC.) National Insurance has also become more redistributive over time as its structure has changed to remove the fixed upper contribution limits, albeit with a much lower rate payable by employees on income above a certain level. It has been discussed that the link between an individual's contribution record and the remaining contributory benefits will be weakened further.
Contents 
1 History
2 Contribution classes
2.1 Class 1
2.1.1 Table letters
2.1.2 Class 1A
2.1.3 Class 1B
2.2 Class 2
2.3 Class 3
2.4 Class 4
3 NIC credits
4 Actuarial reviews
5 National Insurance number
6 National Insurance and PAYE Service
7 Future
8 Contribution Rates - Employees
9 See also
10 References
11 External links
History
A British 1948 National Insurance stamp, once used to collect contributions to the scheme.
The current system of National Insurance has its roots in the National Insurance Act 1911, which introduced the concept of benefits based on contributions paid by employed persons and their employer.The chosen means of recording the contributions required the employer to buy special stamps from a Post Office and affix them to contribution cards. The cards formed proof of entitlement to benefits and were given to the employee when the employment ended, leading to the loss of a job often being referred to as being given your cards, a phrase which endures to this day although the card itself no longer exists.
Initially there were two schemes running alongside each other, one for health and pension insurance benefits (administered by "approved societies" including friendly societies and some trade unions) and the other for unemployment benefit which was administered directly by Government.
After the Second World War, the Attlee government pressed ahead with the introduction of the Welfare State, of which an expanded National Insurance scheme was a major component. As part of this process, responsibility passed in 1948 to the new Ministry of National Insurance. At that point a single stamp was introduced which covered all the benefits of the new Welfare State.
Stamp cards for class 1 (employed) contributions persisted until 1975 when these contributions finally ceased to be flat-rate and became earnings related and were collected along with Income Tax under the PAYE procedures. Older Britons continue to describe making NI contributions as paying their stamp.
As the system developed, the link between individual contributions and benefits was weakened.

The National Insurance Funds are used to pay for certain types of welfare expenditure and National Insurance payments cannot be used directly to fund general government spending. However, any surplus in the funds is invested in government securities, and so is effectively lent to the government at low rates of interest. National Insurance contributions are paid into the various National Insurance Funds after deduction of monies specifically allocated to the National Health Services (NHS). However a small percentage is transferred from the funds to the NHS from certain of the smaller sub-classes. Thus the four NHS organisations are partially funded from NI contributions but not from the NI Fund.

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company

National Insurance Company