What do we pay national insurance for?

Question

there is no way that for people of my age (22) that there will be a state pension left. Are we paying NI just to ensure older people have a pension or does that NI actually cover something else? obviously older people deserve a pension but what wil people of my generation get out of paying the NI all their working lives? anything?

matt f - thats what our council taxes go towards

Answer 1

The NI contribution is just another tax by another name.

We pay close to 60% of what we earn back to the government in direct and indirect taxation, and much of it is swallowed up by a badly managed, top-heavy health-service.

Then there are the civil-servants, who require full pensions.....you know....police, officials, judges, teachers etc.

Then we have to pay for all those computer systems which don't work, and all those local government people who start at 9am and slam the doors shut at 4pm, or hold "training days" and meetings beause they'd rather have an extended tea-break than do some work.

Then we have to pay for the military adventures, security, fire, police, ambulances, bad schools, social services and all the other services which work as badly as the next.

If there's anything left over, the chancellor reluctantly gives the pensioners a couple of quid extra per week, or announces a meagre increase in benefits for the following year.

Of course, we musn't forget all the other taxes, like speed-cameras, corporation tax, company contributions, community charges etc etc.

This is the UK to-day......happy to support a system which will probably strangle us economically eventually, if it hasn't done already.

Don't expect ANYTHING if you fall ill, lose a leg, go blind or manage to reach old-age, because there are more important people in front of you in the queue.

Answer 2

To maintain your pension rights you should be paying class 3 contributions during your time abroad. That is currently £8.10 per week, was £7.10 a week during the last tax year. I don't know if there is any provision to pay retrospectively. you would have to ask the National Insurance Office at Newcastle. Did you pay any contributions before you went? And what will you do when you return here? If you are employed or self-employed, you will pay the relevant contributions, providing your earnings are high enough. To get a pension, you will have to have made so many years contributions, but it may be possible to get a reduced pension if you have made less than the minimum required for a full pension.

Answer 3

Yes, I think that it was primarily for the state pension, the NHS and sickness payments. It used to be ring fenced, but I think that it now goes into the general tax pot, and has done for a long time now.

Lets be clear about the pension aspect. Previous generations have paid for their pensions. It is the governments fault that they did not put this money aside in a pension fund as they insist, by law, that the private sector does. Then they would have had a fund, created from the contributions of the people in preparedness for when they retired. Another way of putting this is, that they should not be paying pensions to people who have now retired out of general taxation, which includes the national insurance contributions of those who are currently in work. That's government accounting systems for you.

Answer 4

We are told that national insurance should largely go to NHS and pension funds... However you are correct that we (i'm 23) are very unlikely to have a livable state pension.

A lot of the problems with the NHS and the pension fund are from their own devices...

The largest problem is that people are living too long and in effect retiring too early. Its quite common now for people to live into their 80's and 90's, but when the pension and NHS service was fromed most men could expect to die in their 60's and women 70's so that in effect is another 20 years of pensions that the NI has to find.

Another big problem is the pension kitty... its a huge mass of easily accessable money which the political parties (labour and conservative) dib into as a 'loan' when they need a lot of money quickly... this money never gets put back generally
(i think there's a 3 billion black hole in the pension fund)

At the moment, the weekly payments in national insurance are just covering the weekly payouts in pensions... which is not a good thing considering our nations population is on the decease.

We will not have a livable state pension... and i cant really answer you why we should pay not to have one ourselves... but the fact remains that the REAL problem is that people are just living too long.

Answer 5

Interesting debate. as an American I have often debated my fellow countrymen n this subject. While I personally have never been an a strong advocate of National Health care. I understand the motivations. if given a choice to return to a private system would you support that. Would you support a hybrid system where the government provides catastrophic coverage at a much reduced rate but routine wellness care and out patient cost would be borne by the individual through the use of tax free medical savings accounts or private plans. I am making no judgments just seeking honest answers? As far as Public Pensions and our own Social Security system we're in the same pickle. So don't feel alone!

Yours Truely a Curious American

Answer 6

National Insurance contributions go towards the costs of the National Health Service as well as the State Pension Scheme. That's not a real answer to your question, I know, and it's a question I've asked myself. I think it's something that's causing the Government lots of headaches and they have, of course, already advised everyone to make other provision for pensions, eg., pension with employer or a private scheme with an insurance company. Certainly a portion of the money you're contributing at present is going to present day pensioners, and those pensioners themselves would also have contributed to the pensioners of their younger days. Can't say more than that really! Start paying into a pension scheme now though, because the earlier you start, the better deal you'll get.

Answer 7

This Site Might Help You.

RE:
What do we pay national insurance for?
there is no way that for people of my age (22) that there will be a state pension left. Are we paying NI just to ensure older people have a pension or does that NI actually cover something else? obviously older people deserve a pension but what wil people of my generation get out of paying the NI...

Answer 8

National Insurance just gets put in with all other government revenue and is treated just the same way as taxation sources of income. It is not put into a fund and invested and really isn't 'Insurance' in any meaningful way.

You seem to have got the idea with the other issues involved! You have a point.

Answer 9

That's funny, I thought you guys had "free" insurance. In America, at least if someone has no insurance, they can go to the county hospitals for FREE, paying nothing, not like you with all your taxes for every single thing.

Yes, the working class do pay for welfare, but you guys not only pay for people on the dole, you pay for everything else on top of it!!

Sorry for sounding like I'm attacking you, I'm not, just fed up with all the systems and all their red tape.

You guys have to take back your country, you have to start speaking up to these people who claim they are doing it for your own good. It's for their own good, nobody else.

Answer 10

Get Real . the Indigenous Population are Paying National Insurance . Council Tax and Hundreds of other Taxes , with more being "Forced upon us" daily - Most of this goes to "Support " the Army of so called "Immigrants " who are here to Exploit , Sponge , Abuse , Whinge , Moan and take advantage of our Generosity .Aided and Abetted by a bunch of Charlatans posing as a Government