Telegraph article wrong to claim there’s ‘no National Insurance fund’

Last week we wrote about competing claims from senior Labour and Conservative politicians over what National Insurance contributions (NICs) are used for.

In an article published on 14 March covering some of these claims, the Daily Telegraph stated: “Contrary to popular belief, there is no National Insurance fund that is used to pay for pensions and the health service.”

This isn’t technically correct. While it's true that NICs don't entirely fund the welfare system and the NHS, there is a National Insurance Fund (NIF), the contents of which are formally separate from other tax revenue, and used to pay for social security benefits.

NICs are collected by His Majesty’s Revenue and Customs. A portion of this revenue is paid directly to the NHS, with the remainder paid into this fund.

That being said, the level of the NIF does not determine the amount spent on social security payments, and can be topped up by general taxation if it doesn’t cover social security payments in a given year. So while there is a separate National Insurance Fund, its existence doesn’t have any meaningful effect on how much money is spent on benefits and the NHS.

We’ve contacted the Telegraph for comment.