National Insurance, benefits and state pension

How does National Insurance affect your benefits?

When you make National Insurance contributions, you build up your entitlement to what are known as 'contributory benefits'.

These include:

• Unemployment benefits, in the form of Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA)
• Maternity Allowance, if you don't qualify for statutory maternity pay
• Bereavement benefits (Bereavement Support Payment, Widowed Parent's Allowance)
• Incapacity Benefit, if you face long-term unemployment because of illness or disability.

Some benefits depend on making National Insurance contributions of a specific class. For example, you won't be able claim contribution-based Jobseeker's Allowance if you haven't been making employee-based National Insurance contributions.

See below for an at-a-glance view.

• Find out more: National Insurance rates - work out how much you need to pay to be entitled to these benefits

How National Insurance affects Jobseeker's Allowance (JSA)

If you are unemployed and looking for work, you may be able to claim Jobseeker's Allowance (JSA), and the amount you receive will depend on your National Insurance contributions.

To claim any type of JSA, you must meet the minimum criteria, namely:

• be over 18 years old
• not working full-time (less than 16 hours a week)
• actively looking for work
• not in full-time education
• not claiming Income Support.

There are two types of JSA that you qualify for by paying into National Insurance: 

Contribution-based JSA

You should be eligible for contribution-based JSA if you have paid or been credited with the minimum National Insurance contributions in the past two financial years.

You'll only qualify for contribution-based JSA if you have paid enough employee National Insurance contributions (Class 1), which normally means over the two tax years before the benefit year you are claiming in. Note that self-employed (i.e. Class 4) contributions will not entitle you to this benefit.

Confusingly, the benefit year begins on the first Sunday in January, so your qualifying period may be longer ago than you think. For example, if you make a claim on 15 June 2024, you need to have made enough NI contributions in the 2021-22 tax year, and the 2022-23 tax year.

This form of unemployment benefit will last up to six months.

If you can claim this type of JSA, it is likely to be the best option, as your savings, capital and partner's income won't affect your entitlement to claim.

But you cannot claim this type of JSA if you haven't made the minimum contributions to National Insurance, have claimed it in the past two years, or are eligible for Universal Credit.

New-style JSA

If you are entitled to apply for Universal Credit, and have made the minimum National Insurance contributions, you have to apply for new-style JSA instead of contribution-based JSA.

It pays the same as contribution-based JSA and also lasts for up to six months.

You can apply for this on its own, or in combination with Universal Credit. If you qualify for both, the value of your JSA will be deducted from your Universal Credit.

• Important note: You can no longer make new claims for income-based JSA; if you're already claiming it, you will continue to receive payments until your claim ends. For new claims, you'll need to check to see if you're eligible for new-style JSA and go to an interview at your local Jobcentre Plus office.

National Insurance and Employment and Support Allowance (ESA)

If you're ill or disabled, you may qualify for Employment and Support allowance. The qualifying conditions are broadly similar to Jobseeker's Allowance - you can qualify for contribution-based ESA, or the new style ESA if you're in a full-service Universal Credit area.

You can't claim ESA and JSA at the same time, or if you are above state pension age.

To qualify for the new style ESA you'll need to be entitled to apply for Universal Credit.

Changes to JSA and ESA benefits

As Universal Credit is phased in, income-based and contribution-based JSA and ESA that depend on your National Insurance contributions are being phased out. These benefits are being replaced by new-style JSA and ESA. The changes are being rolled out alongside Universal Credit.

Universal Credit is also replacing Income Support, Housing Benefit, Child Tax Credit and Working Tax Credit.

• Find out more: what is Universal Credit?

National Insurance contributions and your state pension

State pension is available only to people who have paid, or been credited with, enough National Insurance contributions.

New state pension rules (after 2016)

From April 2016, the number of qualifying years for the full state pension increased to 35 for both men and women.

To get any state pension, you must have at least 10 qualifying years of National Insurance contributions (NICs). The amount you'll get is proportionate to your contributions - for example, if you have 20 years' full contributions, you'll get 57% (20/35) of the full amount.

At the same time, the state pension changed from a two-tier system (basic state pension and additional state pension) to a single-tier system.

Old state pension rules (until April 2016)

Anyone reaching state pension age on or before 6 April 2016 had to build up 30 years' worth of NICs to get a full state pension.

People in this age group may also still be entitled to the additional state pension - and partners may be able to inherit a portion of this upon their partner's death.

• Find out more: how much state pension will I get?

State-pension age increases

You can only claim this benefit once you reach the 'state pension age'.

The state pension age for women has changed over an eight-year period. The state pension age for men and women increased from 65 to 66 between April 2018 and April 2020.

It's set to reach 67 for those reaching state pension age before 2028, and eventually 68 for those reaching retirement by 2044.

There is every possibility it will rise further in future.

• Find out more: use our state pension age calculator to determine when you qualify

Contracting out of National Insurance

Some people may find that previous National Insurance contributions don't count towards the limit needed to receive the maximum state pension. That’s because they had contracted out.

While this is no longer possible, it was an option for those in defined benefit company pension schemes. Because they were making their own private pension arrangements, they were able to pay lower NI contributions. The easiest way to find out whether this applies to you is to speak to your employer from the time, your pension scheme, or check your old payslips.

• Find out more: what was contracting out?

National Insurance - Class 3 voluntary contributions

If you're unlikely to qualify for the full state pension because you haven't made enough National Insurance contributions, it's possible to make voluntary Class 3 NICs to fill any gaps in your record. These are £17.45 per week in 2024-23, the same as 2023-24. It was raised last financial year from £15.85 per week in 2022-23. 

A full year's worth of NICs costs £907.40 in 2024-25. If you're filling previous years, you'll pay the cost for the current year, rather than for the year you are making up for.

You can normally go back a maximum of six years, though some people may be able to top-up over a longer period.

Calculating the benefit of making additional NICs is quite complicated, so we've explained everything you need to know in our guide to topping up the state pension.

National Insurance entitlement to Bereavement Support Payment

The Bereavement Support Payment (BSP) has replaced bereavement allowance, widow's pension, bereaved payment and widowed parent's allowance.

You may be eligible to receive Bereavement Support Payments if your spouse, civil partner or partner you were living with as though you were married died in the last 21 months; to get the full amount, you must claim within three months of their death.

To find out more, visit our guide on widow's pension and bereavement allowance.