The NIF (National Insurance Fund) is the main fund that holds all contributions from your pay towards National Insurance. NIC (National Insurance Contributions) are paid by most taxpayers at 12 percent from a lower threshold to an upper limit and then at 2 percent on gross earnings over the limit. For example, a person earning £20,000 in the current tax year would contribute £1,390 in Class 1, A Standard NIC contributions. Someone earning £50,000 would contribute around £4,630.
Some of the NIC payment taken from your pay is used to fund the NHS (National Health Service), the remaining amount of your NIC payment goes into the NIF. Funds in the NIF are ring-fenced and used to pay out things like unemployment benefit, sickness and other benefits and pensions.
For the 2017 and 2018 tax years here is a breakdown of how much was paid in NIC (National Insurance Contributions):
| Type of NIC | 2017 tax year | 2018 tax year |
|---|---|---|
| Class 1 (Employed) | £92.1 Billion | £97.2 Billion |
| Class 1A & 1B (On Benefits) | £1.2 Billion | £1.3 Billion |
| Class 2 (Self-Employed Flat Rate ~ &;pound3/wk) | £401 Million | £322 Million |
| Class 3 (Voluntary) | £13 Million | £69 Million |
| Class 3A (Voluntary) | £99 Million | £40 Million |
| Class 4 (Self-Employed) | £1.97 Billion | £2.3 Billion |
The figures in the table above include payments made by both employees and employers.
In 2018 the total receipts in NIC (National Insurance Contributions) were £103.8 billion and total paid out was £101.5 billion, leaving a net balance for the NIF of £2.3 billion. In 2017 the total receipts in NIC (National Insurance Contributions) were £98.3 billion and total paid out was £99.5 billion, leaving a zero balance for the NIF, an overspend of £1.2 billion.
Payments out of the NIF can be broken down as follows, for 2017 and 2018:
| Benefit Type | 2017 tax year | 2018 tax year |
|---|---|---|
| State Pension | £91.7 Billion | £93.7 Billion |
| Employment & Support Allowance | £4.7 Billion | £4.74 Billion |
| Bereavment Benefits | £561 Million | £511 Million |
| Maternity Allowance | £437 Million | £427 Million |
| JSA (Jobseeker's Allowance) | £265 Million | £224 Million |
| Christmas Bonus | £126.4 Million | £125.9 Million |
| Guardian’s Allowance | £2.11 Million | £2.19 Million |
| Incapacity Benefit | £8.8 Million | £0.7 Million |
Note. Incapacity Benefit was replaced by Employment & Support Allowance in 2018.
Administrative costs related to the NIF were £695 million in 2017 and £708 million in 2018. Over 60 percent of costs related to the Department for Work & Pensions. 30 percent of costs relate to HM Revenue and Customs.
As of the end of the 2018 tax year, the balance remaining in the NIF (National Insurance Fund) is £24.2 billion. In the previous year the balance was £21.9 billion. The account received investment interest of £77 million in 2018 and £79 million in 2017.
These figures are all related to Great Britain. Northern Ireland is treated separately, although around £534m and £635m were transferred from the Great Britian NIF to the Northern Ireland NIF in 2017 and 2018, respectively.
The following figures relate to Northern Ireland.
For the 2017 and 2018 tax years here is a breakdown of how much was paid in Northern Ireland in NIC (National Insurance Contributions):
| Type of NIC | 2017 tax year | 2018 tax year |
|---|---|---|
| Class 1 (Employed) | £1.84 Billion | £1.89 Billion |
| Class 1A & 1B (On Benefits) | £25 Million | £26.6 Million |
| Class 2 (Self-Employed Flat Rate ~ &;pound3/wk) | £10 Million | £7.2 Million |
| Class 3 (Voluntary) | £0.4 Million | £2.8 Million |
| Class 3A (Voluntary) | £0.4 Million | £0.35 Million |
| Class 4 (Self-Employed) | £50.3 Million | £54.2 Million |
The figures in the table above include payments made by both employees and employers.
In 2018, in Northern Ireland, the total receipts in NIC (National Insurance Contributions) were £2.689 Billion and total paid out was £2.686 billion, leaving a net balance for the Northern Ireland NIF of £3.9 million. In 2017, in Northern Ireland, the total receipts in NIC (National Insurance Contributions) were £2.522 billion and total paid out was £2.630 billion, leaving a zero balance for the Northern Ireland NIF, an overspend of £109 million.
As of the end of the 2018 tax year, the balance remaining in the Northern Ireland NIF (National Insurance Fund) is £616 million. In the previous year the balance was £612 million. The account received investment interest of £3.1 million in 2018 and £3.5 million in 2017.
Payments out of the Northern Ireland NIF can be broken down as follows, for 2017 and 2018:
| Benefit Type | 2017 tax year | 2018 tax year |
|---|---|---|
| State Pension | £2.21 Billion | £2.29 Billion |
| Employment & Support Allowance | £340 Million | £330 Million |
| Bereavment Benefits | £19.86 Million | £18.6 Million |
| Maternity Allowance | £12.8 Million | £12 Million |
| JSA (Jobseeker's Allowance) | £14 Million | £12 Million |
| Christmas Bonus | £3.517 Million | £3.508 Million |
| Guardian’s Allowance | £64,000 | £64,000 |
Note. Incapacity Benefit was replaced by Employment & Support Allowance in 2018.