| Receipts | |||
|---|---|---|---|
| National Insurance contributions | 5.2 | 130,901,352 | 138,649,520 |
| Income from NIF Investment Account | 5.3 | 4,158,579 | 3,881,306 |
| Compensation for statutory pay | 5.4 | 3,173,000 | 2,969,000 |
| Redundancy receipts | 5.5 | 29,224 | 29,634 |
| State Scheme Premiums | 5.6 | – | 1 |
| Personal pension receipts | 5.7 | – | 8 |
| 138,262,155 | 145,529,469 | ||
| Less | |||
| Payments | |||
| Benefit payments | 5.8 | (143,197,101) | (129,827,870) |
| Administrative costs | 5.9 | (856,212) | (491,201) |
| Transfers to Northern Ireland NIF | 5.10 | (690,900) | (672,856) |
| Redundancy payments | 5.5 | (487,120) | (494,374) |
| Other payments | 5.11 | (101,100) | (110,493) |
| (145,332,433) | (131,596,794) | ||
| Receipts less payments | (7,070,278) | 13,932,675 |
Statement of balances
| As at 31 March | Notes | 2025 (£000) | 2024 (£000) |
|---|---|---|---|
| Opening balance | 86,418,788 | 72,486,113 | |
| Receipts less payments | (7,070,278) | 13,932,675 | |
| Balance as at 31 March |
These accounts are produced annually for the National Insurance fund. Many of the people commenting on the State Retirement fund seem unaware of this structure. Most the so called benefits paid out by the Fund are the State Retirement Pension entitlements, based on people’s age and past NI contributions.(97%).
The government Actuary makes an annual appraisal of solvency, with five year forecasts. His 2026 Report stated there is likely to be a surplus of tax revenue over spending every year from 2026-7 to 2030-31, a five year run. The fund needs to keep a substantial working cash balance to pay pensions. This is likely to be over £100 bn this year and rising.He thinks the accumulated surplus will reach £160 bn 2030-31.
The Treasury has to make payments to the Fund if the Actuary judges it to need them, last required ten years ago. The Treasury may not take surplus money out to spend elsewhere without a change of law or Parliamentary approval to do so .
A proportion of National Insurance, currently £35 bn, is sent to the NHS every year and not transferred into the Fund. Increasing the proportion of NICs taken in this way would also need a law change. I am setting this out as so many people debating NIC s seem unaware of the special treatment and their special purpose, which is to pay pensions based on contributions.
The needless and damaging increase in NI Contributions by Reeves means the Actuary forecasts a surplus as high as £160 bn by the end of the decade.
September 14, 2026
About 24% of the working age population work in the public sector. QUANGO’s get to spend about 32% of national income. Both are completely unsustainable.
UK gross domestic product grew by 0.4% month on month in July, beating forecasts. The economy was outstripping all forecasts substantially, against a consensus estimate of no growth
Despite Labour’s best efforts, annual GDP growth accelerated to 1.6% year-on-year in July, up from 1.1% the previous month and its fastest pace since early 2025, according to the Office for National Statistics
Information and communication services were up 8.1% year on year (the AI bounce?) with professional, scientific and technical activities up 3.5%. Manufacturing rose 2.6% year on year
With the energy price cap surging by 13% in July due to Trump’s war on the Ayatollahs and oil prices continuing to climb higher, inflation concerns are once again being sparked. Healey’s budget at the end of October is a further focal point for markets, with the chancellor under pressure to address the government’s borrowing position and find new money for defence.
The average one-year fixed rate for savings has risen for six consecutive months and stands at 4.28%, the highest yield since September 2024 and 0.7 percentage points ahead of the consumer prices index
September 14, 2026
Why is so much political capital being wasted on the so called unsustainable triple lock when the fund is in surplus.
We must kill off this notion that the State Pension is a benefit when it is most definitely an entitlement. This of course will change when the newcomers who don’t contribute want paying.
September 14, 2026
Indeed I even made voluntary contributions to maximise my UK state pension to more up for years when I was overseas.
September 14, 2026
Military aircraft reportedly blamed for UK air traffic control outage it seems. So we have a system that falls nationally (over for 4 hours) due to one military aircraft being put on the system (perhaps incorrectly done) do we? How many bat tunnels or fish discos did they have to build to set up the hardware and keep English Nature happly? Or perhaps did they have a Prof. Jason Arday diversity appontment type designing the system.
Can the UK government and state sector do anything efficiently either themselves or by subcontracting it seems not.
September 14, 2026
I paid SERPS for a number of years, a hypothecated tax for an increased state pension.
Are the advocates of stealing the state pension, going to refund SERPS payments with investment returns and interest, or is this to be stolen as well ?
September 14, 2026
Yes.
People were told that of they contributed what was asked they ‘would be looked after from cradle to grave’.
Those people are owed a debt of and as their fund is in surplus there is absolutely no reason why their state pension, secured against ‘the deliberately increased cost of living’ is not Honoured.
Of course Government spending must be cut – first and foremost to foreign countries and people.
Deport deport deport – and having looked at pictures of some pro-migration demonstrations – section section section!
The native British WILL WORK in their own country where they have a hope of making a worthwhile life for themselves.
The PM urges blind Hope because even he knows that they have destroyed all hope.
It’s criminal. No generation has attacked their own children in this unnatural way in the whole history of the world.
September 14, 2026
‘No generation has attacked their own children in this unnatural way in the whole history of the world’ – I think that’s a tad over-the-top!
I mean the Aztecs sacrificed their own children ..
September 14, 2026
What – the whole generation of children?
September 15, 2026
I wondered why they died out. No children remained to breed? *sarc*
September 14, 2026
The Triple Lock is projected to take pension spending from about 5% of GDP today to between 8% and 9% of GDP within 50 years. That’s an increase of more than the current defense budget. How will such an increase be paid for?
(When the state pension first came in to being it cost.2% of GDP.)
The Triple Lock clearly needs reforming.
September 14, 2026
Britain spends less on state pensions as a proportion of GDP than almost any other developed country, so the pension and triple lock can be afforded.
To not do so would be a deliberate choice.
September 14, 2026
@peter parsons: The cost of the state pension is about £150bn. So far as I know there is no proposal to freeze it entirely. The current locks are CPI, average earnings and a flat 2.5%. CPI is 2.9% and average pay rise 3.5%-4.1% (with bonuses).
What is suggested is limiting increases to a double or single lock. Were that to happen the amount saved would be the difference between the retained lock and the abandoned upper lock of the TL.
On current figures that would be at most £2.25bn – 0.02% of government expenditure or 0.01% of GDP.
September 15, 2026
I have no problem with some sort of formula to calculate the value of the state pension. A fixed percentage of median earnings or of GDP per capita would be other options. However, the Triple Lock combined with cureent demographic shifts (an ever increasing percentage of the population being of pension age) make the TL unsustainable in the long term.
Every politician knows this, but so far none have the guts to grasp the nettle.
September 14, 2026
The size of the state sector is indeed unsustainable.
“The needless and damaging increase in NI Contributions by Reeves means the Actuary forecasts a surplus as high as £160 bn by the end of the decade.” Needless, damaging and entirely counterproductive. The surplus also helps by the decreased life expectancy due mainly to the vastly expensive net harm Covid “Vaccines” and net harm lockdowns.
Roger Bootle today in the Telegraph.
“Only a financial crisis would shock Labour into cutting welfare
The Government should tread carefully, financial crises often occur in the autumn”
Hard to see what the Chancellor can do in six weeks (given that Labour MPs and this Cabinet will not allow anything sensible to pass). The doom loop will thus continue tax increases (or new taxes) will raise less tax not more overall and further cripple the economy.
September 14, 2026
The analysis, based on data from the Office for National Statistics between 2022-24 and 2012-2014 of life expectancy in the UK has fallen by about 2 years between these periods so about a 3% reduction. Mainly it seems due to the net harm Covid “vaccines” and probably not helped by the fairly dire NHS, especially maternity care and perhaps a few oldies not being able to afford to keep warm in winter due to net zero.
September 14, 2026
Rachel from Complaints has screwed potential employment increases by her unjustified treatment of NI. Now is the time to increase the threshold on payment and reduce the rate for lower end incomes. Any surplus forecast should be used to energise numbers in work and assist help for hard-working families with lower taxation measures.
September 14, 2026
At 81 I find this post a much needed fillip to my mind. Everyday in most if the MSM one feels somewhat pilloried as a pensioner, a fiscal drag upon the state. I can assure you that I and my peers will be greatly relieved. Thank you.
September 14, 2026
+1
September 14, 2026
This pay as you go system is fine until it isn’t.
It would be more instructive to have a balance of promises made versus likely income 2030-2060. Viz. no promises other than +you’ll get a state pension+ and far less income I imagine.
September 14, 2026
where is the table for people who have never contributed at all, either been on benefits their entire working life, or an immigrant to the UK close to retirement age ?
for such people, with few savings, they will get pretty close to a full pension in old age in benefits, having never ever contributed to the national insurance fund.
the unfairness compared to those who have paid into the system massively is stark.
so this whole table is missing important elements.
it is also missing a significant part of the workforce which is exempt from paying national insurance, which John does not like to mention despite it being massive
Reply Some people are credited NI by the state to gain a pension. Of course pensioners do not pay NI contributions as they become the beneficiaries of the fund.
September 14, 2026
yes sort of. although many people retire in staged ways. so start taking part of their private pension at say 60, and slightly more at other ages, while working in parallel maybe part time etc, before taking fuller amounts at the state pension age. its only at the state pension age that people are assured of not paying any NI.
September 14, 2026
I admit that I’ve always believed that NI was just another form of income tax and just disappered into the Governments pockets (there being no ‘Fund’ as such) with the State Pension being paid out of the Treasury’s petty cash tin and therefore needing as much to be paid in, as was paid out. So this statement came as a complete surprise to me!
If this is so, why does the State Pension get included in any debate involving “Benefit” payments and why so much concern over the triple lock? I’m now totally confused (which is not unusual these days)
September 14, 2026
If the state pension is classed as a benefit, why are public sector workers pensions not also classed as a benefit, and when will they be curbed ?
September 14, 2026
Thanks John the NI increase must be one of the most damaging tax increases in recent history
September 14, 2026
From the currenty hugely over tax position any further increases in taxes are hugely damaging and countrer productive too.
The combination of employers NI increases, threshold freezing, the minimum wages increases, the worker rights bill, rip off net zero energy and other red tape has done vast damage to employment oportunities especially youth employment which is hugely damagaging, cruel and a disaster for the country and the economy.
The workers rights bill and all these are for many the right to be on the dole for years or perhaps for ever.
September 14, 2026
Worrying. Governments will regard that surplus as meaning they can dip into the fund any time they want and for whatever purpose. I recall companies with final salary schemes doing this when their fund was in surplus and this had severe consequences later for some of them.
September 14, 2026
The standard State Pension after 35 years of contributions is just £3.30 per week more than the maximum Pension Credit benefit paid without any contribution at all. Nothing is paid for contributions in excess of 35 years.
September 14, 2026
Why did administrative costs rise by so much (74%)?
September 14, 2026
Why do we have to trust HMG with our health and pension insurance?
That makes it a healthy pension fund, but what will they do with it – no doubt they will find some other use for that surplus even if it means new legislation.
It should mean that pensioners are paid a decent pension with no need to get rid of the triple lock.
I hope REFORM have the guts to do something about this Ponzi scheme by having all working people use a private pension insurance company. At the same time the same working public could insure themselves against health issues, which would mean more private health care professional companies to drag the quality of the NHS up to a decent standard.
Those that cannot support themselves would have to take their lace in the NHS queue system while receiving benefits from general taxation.
The NHS would become another health care provider competing for business.
September 14, 2026
Thank you for printing the NHI balance sheet. I do understand the theory of how it runs in the UK, but if we stick to the phrase National Insurance it infers an insurance scheme as would be commonly run commercially. Although not 100% correct, I’m talking perception, we see life insurance and pensions, health, even unemployment schemes, as investment funds/schemes, your fund with these operations is what you pay plus the investment income the operator generates. That is not how NHI works as shown in the balance sheet what is available to pay out is not from investment earnings but is limited to having enough ‘people paying in’. That why I suggested it is a ‘Ponzi’ scheme, we used to call it a Pyramid scheme, there is no return from what the payee pays in.
The UK with an ageing population cannot sustain payouts without a population explosion, which is why some get to conclude the UK Parliament needs to sustain not deter incomers, legal and illegal going forward. It could be said the ‘boats’ won’t be stopped because the UK Parliament needs to fund their promises made on their Ponzi scheme.
Having the compulsion of a National Insurance Scheme, is good, which at today’s rates is a tax of 24%(employee/employer) of income gained from every person employed in the county which is on top of their tax paid. That volume of money should in a commercial sense earn, and earn big and fulfil its purpose regardless of how many new contributors.
Operated on a fully function terms as an investment, to pay out at the mean average of 3% i.e. the quoted £283million would take a fund around £9 billion. That would be £9billion invested in the country by the country. – Chagos £3.4billion, Erasmus £0.5billion every year, other wasted payments to the EU etc. So, a £9billion fund is not out of reach, but the ‘will’ in Parliament is. Margaret thatcher saw it Gordon Brown killed it.
Often sited as the Country that did it the right-way the Norwegian State Fund stands at £1.71 trillion, then on the commercial front we have Blackrock hovering around £11.35 trillion. Blackrock is earning the investment’s it carries in excess of 15% a year. If that was the NHI money invested? But of course, we know the UK Parliament can run things better than any commercial operation(sarc)
The NHI may have survived 80 years, but that’s it ‘survived’. I am one of these people that is odds with the way the UK Parliament is portrayed and how its acts I would have expected a high-end management focused on earning not spending. I want to see the UK really earn so it can ‘then think’ about spending being balanced against those earnings – the opposite to today’s thinking in Parliament
September 14, 2026
Well done SIr John for emphasizing the separate nature of the National Insurance fund. Most people these days say it is the same as income tax so why not just merge them ?
I am dead against that, because the NI fund is dedicated to paying those who have contributed. That is a very important distinction from other benefits that needs strengthening, not weakening.
Just because it is in surplus presently does not mean it will remain so. As you can see in 2025 it made a loss. Going forward it is going plunge into the red because of the increase in pensioner numbers.
Your chancellor cut the employee contribution from 12% to 8%, which I believe he did simply to leave Labour with a problem. Very irresponsible.
September 14, 2026
But if you have not contributed (and have not saved anything) you get virtually the same often more anyway in benefits.
September 14, 2026
Thanks for a most informative diary. I suspect many MP’s and local councillors are largely ignorant of this fund and how it’s managed. It is clearly wrong to lump pension payments with welfare payments and claim these payments are unaffordable. Yes welfare is too generous for too many people who should be in work but the state pension NI fund appears to be reasonably healthy and should be left alone. I made NI contributions for well over fifty years.
September 14, 2026
As JD Vance tweeted today “The Trump Administration will hold every corporation accountable for replacing American workers with cheap foreign labor” it is a shame that no British government is likely to tweet the same obvious message about workers here. Indeed the British governments of all flavours has actively encouraged the very thing the US Administration is against.
We have a clown grade ruling class.
September 14, 2026
Some media are reporting that the ‘blue lady’ on the 4th plinth cost upto £1.3 million and GB news are reporting that we are giving £665 millions to Angola …..is the UK filthy rich ?
September 14, 2026
the government gave 665 million quid to Angola today, seems they dont think we are short of money…