National Insurance Fund - Up-rating report
The National Insurance Fund (NIF) for Great Britain receives income from National Insurance contributions and is used to pay State Pensions and other benefits.
Credit: Shutterstock
National Insurance contributions are split between the NHS and the NIF. As required by legislation, GAD reports annually on the effect of the April up-ratings, and every 5 years we undertake a long-term review of the Fund. This year we have produced both the annual Up-rating report and long-term Quinquennial Review of the NIF.
Up-rating report
The annual Up-rating Report published in January 2022, projected contribution income, benefit payments and the balance of the NIF over the next 5 financial years. Contribution income and benefit payments are currently around £120 billion each year.
The Up-rating report showed the NIF is projected to be in surplus in each of next 5 years, although that surplus will generally decrease each year. These figures mean that it’s not anticipated there will be any payment required to the NIF from HM Treasury over the next 5 years.
Quinquennial Review
The Up-rating Report was complemented by the Quinquennial Review. We undertake this detailed review every 5 years and examine factors such as changes in the age structure of the UK population and changes in state pension age. This in-depth report has a 65-year projection.
The Quinquennial Review looked at the long-term relationship between benefit payments (mainly state pensions) and contribution income (mainly national insurance contributions) and projected these for each year to 2086.
GAD used a project management framework that incorporated the Report to Parliament on the 2022 re-rating and up-rating orders and the Quinquennial Review as a single project. This led to delivery of this Review in our contemporary and accessible reporting style both efficiently and quickly.