NATIONAL INSURANCE ACT

"It was first proposed in the 1908 "People's Budget" of David Lloyd George, along 
with a dramatic expansion of the scope of Income Tax and plans for a system of 
old age pensions (which would be funded at this time by general taxation). 

The scheme, which came into effect in July 1912, was intended to create a
national system of insurance for working people against illness and unemployment. 
All wage-earners aged between 16 and 70 were obliged to contribute 4d per week, 
while employers paid 3d and the state 2d. In return, workers were entitled to a 
level of free medical care and advice, and a "dole" of 7 shillings per week for 
up to 15 weeks per year in the event of unemployment. 

In its early days, the scheme was administered by "approved societies",
voluntary friendly societies authorised and underwritten by the Government, and 
regulated by four Insurance Commissions. The powers of the Insurance Commissions 
were assumed by the new Ministry of Health (and the Welsh and Scottish Boards for 
Health) in 1919. In 1925, the Ministry of Health was charged with the administration 
of contributory pensions under the Old Age, Widows' and Orphans' Contributory 
Pensions Act 1925, which replaced the older system."

Source:

http://www.politics.co.uk/issues/national-insurance-%243196395.htm