Self Employed People and National Insurance Contributions

To explore knowledge and understanding among self-employed people of the Class 2 NICS scheme, including liabilities for payments, associated entitlements to contributory pensions and benefits, and views regarding participation in this scheme. The research also considered contributors' knowledge and understanding and their preferences for payment method. The main findings are: Individual people do not fit neatly into those who do and do not register with the CA, do and do not pay regularly, and do and do not get into debt. People may fall into all these categories at different stages in their working lives. Reasons for not registering immediately for NICs included non-recognition of formal employment status and corresponding NI liabilities and not getting round to the task in a busy start-up period. A number of factors influenced the maintenance of a pattern of regular payments: feelings of obligations to comply, incentives, in terms of benefits expected in return, avoidance of penalties, interventions, such as advice, prioritisation of income, such that NICS were relatively high on a list of priorities, appropriate methods of collection of payments, and knowledge and understanding. Many factors lead to people missing Class 2 NICs payments including: financial constraints, financial choices, transitional situations, receipt of wrong information, experience of procedural and administrative aspects, lack of commitment to the NI scheme, dissatisfaction with entitlements and views on indebtedness. Those who got into serious debt to the CA generally had no specific complaints about they way they were treated. Most were trying to repay what they owed. Factors that help people deal with debts to the CA included: considerate, helpful and understanding staff, time to pay, sensible negotiations, advice and support from professionals, stability of income.