National Insurance Guide UK 2026

3. Self-Employed National Insurance

Self-employed individuals have a different structure for National Insurance, primarily involving Class 2 and Class 4 contributions. Your liability is calculated based on your annual profits via your Self Assessment tax return.

Class 2 National Insurance

Class 2 NI is a flat weekly rate. While there have been moves to simplify this, for the 2025/26 tax year, the structure is as follows:

Rate: £3.45 per week.
Threshold: Payable if your profits exceed the Lower Profits Threshold of £12,570.

If your profits are below £6,725 (Small Profits Threshold), you can choose to pay Class 2 voluntarily to keep your contribution record intact for state pension purposes. If your profits are between £6,725 and £12,570, you are treated as having paid Class 2 contributions without actually having to pay them—a credit mechanism that protects low-earning self-employed workers.

Class 4 National Insurance

Class 4 is profit-related and makes up the bulk of self-employed NI costs. The rates for 2025-26 are:

Annual Profits	Rate
Up to £12,570	0%
£12,570 to £50,270	6%
Over £50,270	2%

Unlike income tax, Class 4 NI is not paid on other sources of income like dividends or property rental; it is strictly on trade profits.

4. Voluntary Contributions (Class 3)

If you have gaps in your National Insurance record—perhaps due to working abroad, low earnings, or career breaks—you may not qualify for the full State Pension. You can plug these gaps by making voluntary Class 3 contributions.

2025/26 Class 3 Rate: £17.45 per week.

Before paying, it is always advisable to check your state pension forecast to ensure that paying for extra years will actually increase your pension entitlement.

5. National Insurance Credits

You may be entitled to National Insurance credits if you are not working or earn below the Lower Earnings Limit (£123 per week) but meet other criteria. These credits count towards your State Pension as if you had paid.

Common situations where you receive credits include:

Claiming Child Benefit for a child under 12.
Receiving Jobseeker's Allowance or Employment and Support Allowance.
Being a carer for more than 20 hours a week (Carer's Credit).

6. National Insurance and the State Pension

The new State Pension is entirely dependent on your National Insurance record.

Minimum Requirement: You usually need at least 10 qualifying years to get any State Pension.
Full Amount: You generally need 35 qualifying years to receive the full new State Pension.

If you have between 10 and 35 years, you will receive a proportionate amount. Checking your NI record via the HMRC app or website is crucial for long-term financial planning.

7. Checking Your Record

It is recommended to check your National Insurance record at least once a year. You can do this via the specific "Check your National Insurance record" service on GOV.UK. This service will show you:

What you have paid up to the start of the current tax year.
Any National Insurance credits you have received.
If there are any gaps in your contributions.
How much you can pay to close those gaps.

Comprehensive Breakdown by NI Letter

Most employees are under Category A. However, different category letters affect the rates:

A: Standard rate (described above).
B: Married women and widows paying reduced rate (historical).
C: Employees over State Pension age (Employer pays, Employee usually pays 0%).
H: Apprentices under 25 (Standard employee rate, Employer often pays 0% on earnings up to £50,270).
M: Employees under 21 (Standard employee rate, Employer often pays 0% on earnings up to £50,270).

The recent changes to the Employer NI threshold (down to £5,000) have significant implications for businesses employing part-time staff who were previously below the secondary threshold.

Frequently Asked Questions

What is the NI rate for employees in 2026?

For the 2025-26 tax year, employees pay 8% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270.

How much is Class 2 National Insurance?

Class 2 National Insurance is charged at £3.45 per week for self-employed individuals with profits above the Small Profits Threshold of £6,725 (though liability usually aligns with the Lower Profits Limit of £12,570 for mandatory payment scenarios or voluntary to protect pension rights).

What is the Class 4 NI rate for self-employed?

Self-employed individuals pay Class 4 NI at a rate of 6% on profits between £12,570 and £50,270, and 2% on profits over £50,270.

How many qualifying years do I need for a full state pension?

You generally need 35 qualifying years of National Insurance contributions or credits to receive the full new State Pension.

How much are voluntary Class 3 contributions?

Voluntary Class 3 National Insurance contributions are currently priced at £17.45 per week.

Did Employer National Insurance increase?

Yes, following the budget announcements effective from April 2025, the Employer (Class 1 secondary) rate increased to 15%, and the secondary threshold was reduced to £5,000 per year.

Do I pay National Insurance after State Pension age?

Employees generally stop paying Class 1 NI when they reach State Pension age. However, employers may still have to pay employer contributions on those earnings.