How much money you'll pay
Class 1
Class 1 contributions are based on how much you earn. They are paid to us by your employer.
Paying contributions if you're employed
Class 2
Class 2 contributions are paid by you. If we don’t hear from you, your contributions bill will be £715.46 per month in 2017.
If you have receive a Class 2 contributions statement (bill)
What are contributions?
Contributions are payments that you and your employer make by law. They go towards contributory benefits such as:
Sickness Pay
Maternity Benefit
Home Carers Allowance
Old Age Pension
Who must pay contributions
You're liable to pay contributions if you are:
This means that you're liable to pay contributions even if you are:
studying
looking after a family
not working
Difference between Class 1 and Class 2 contributions
Class 1
You pay Class 1 contributions if you are employed for eight hours or more per week.
6% is deducted from your wage and 6.5% is paid to us by your employer.
Class 2
You pay Class 2 contributions if you're not employed. This includes people who are:
self-employed
students
looking after a family
not working
Why you pay contributions
Contributions are paid so that we can provide a range of Social Security contributory benefits and health services to you when you’re in need. The table below shows where your contributions go.
| Class 1 (Employee) | 5.2% | 0.8% |
|---|
| Class 1 (Employer) | 5.3% | 1.2% |
|---|
| Class 2 | 10.5% | 2% |
|---|
| Amounts over the standard earning level (Class 1 and Class 2) | 2.0% | 0% |
|---|
Depending on your contribution record, you may be entitled to the full range of benefits.
These benefits include:
Short Term Incapacity Allowance
Long Term Incapacity Allowance
Incapacity Pension
Maternity Allowance
Maternity Grant
Old Age Pension
Death Grant
Survivor’s Benefit
What happens if you don’t pay contributions
By law, everyone is liable to pay contributions. You may be prosecuted if you don’t pay.
Depending on your financial circumstances, you may be able to apply for a Small Income Exception. This means that you will have a gap on your Social Security record and this may affect your future benefits.
Benefits such as a pension and sickness pay may be reduced or you may not qualify at all.
People on a small income
If you can’t afford to pay contributions
In some cases, contribution credits are available. These protect your Social Security contribution record whilst you are studying or looking after children under school age. They also protect your entitlement to certain benefits.
You must apply for these as we don’t add them to your record automatically.
Contribution credits for people off work sick / injured
Contribution credits for people who have been made redundant
Contribution credits for a stay at home parent: Home Responsibility Protection
Student credits for people over 18 in full time education
We can also cover the contributions of people on:
- Maternity Allowance
- Survivor's Allowance
- Home Carer's Allowance
When to pay contributions
Class 1
You’ll pay Class 1 contributions through your wages. You don’t need to do anything as these are paid directly to us by your employer.
Class 2
Class 2 contributions should be paid every quarter. Rates vary depending on your income and circumstances.
Contact us to discuss your options.
Pay contributions and instalments
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