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.
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.