Class 2 National Insurance is primarily paid by self-employed individuals with profits above the Small Profits Threshold (£6,845 in 2025/26), though it became largely voluntary/automatic from April 2024. Those with lower profits can pay voluntarily to protect state pension/benefit entitlements. Specific workers like share fishermen also pay.
Class 2 NI are flat-rate weekly payments made by most self-employed individuals between 16 and the State Pension age. These contributions entitle individuals to certain state benefits.
Class 2 contributions are a flat weekly rate for those earning above the small profits threshold, while Class 4 contributions are based on profits above a certain limit. Knowing the differences and payment methods can help self-employed workers manage their tax obligations and qualify for certain state benefits.
Class 2 NIC – whether paid on a mandatory or voluntary basis – are a fixed weekly amount: £3.50 per week for 2025/26 and £3.45 per week for 2024/25 (see below for more details). As mentioned above, from 6 April 2024, self-employed taxpayers no longer need to pay class 2 NIC.
You can pay Class 3 voluntary contributions if you're unemployed and the following are both true: you're not claiming benefits. you're not getting National Insurance credits.
Class 2 National Insurance and your 2024 to 2025 Self Assessment tax return
Who pays class 1?
An employee's Class 1 National Insurance is made up of contributions: deducted from their pay (employee's National Insurance) paid by their employer (employer's National Insurance)
Is it worth paying class 2 voluntary contributions?
Yes, you should consider paying voluntary Class 2 NICs if your self-employed profits are below the Small Profits Threshold (£6,725/£6,845 depending on tax year) to protect your State Pension entitlement and avoid gaps in your National Insurance record, as this is cheaper than voluntary Class 3 NICs and secures qualifying years for benefits. It's worthwhile if you need more qualifying years for the full State Pension (35 years) or to reach the minimum 10 years for any entitlement, but not if you already have 35 years or are likely to get credits from other means like Child Benefit.
How many full years of NI do I need for full pension?
To get the full UK State Pension under the new system (for those reaching State Pension age after April 2016), you generally need 35 qualifying years of National Insurance (NI) contributions, while 10 years are needed for any pension, and less than 10 means no State Pension. Some people with records before 2016 (who were "contracted out") might need more than 35 years, while others might get a pro-rata amount for 10-34 years, and voluntary contributions can fill gaps.
If that's the case, you might want to take your age, halve it, and pay in that percentage of your salary. So, if you're 30, pay 15% of your salary into your pension. If you're 40, pay in 20% of it. Of course, that only gives you a rough idea of how much to save.
Yes, Class 2 National Insurance Contributions (NICs) for the self-employed were effectively abolished as a compulsory payment from April 6, 2024, simplifying things so those with profits above the Lower Profits Limit (£12,570) only pay Class 4 NICs and get a NICs credit, while those below the Small Profits Threshold (£6,725) can pay voluntarily to protect their State Pension, making the system more streamlined for most.
Is it worth paying into a pension if self-employed?
Yes, pensions are highly worth it for the self-employed, offering significant tax benefits and a structured way to build retirement savings, compensating for the lack of employer contributions and providing flexibility to match irregular incomes, though you must proactively set them up, unlike employed individuals with auto-enrollment. They become crucial for a comfortable retirement, given the limited State Pension, and provide tax relief, boosting your pot faster than other savings.
How does HMRC catch people on self-employed that do not pay tax?
How does HMRC catch self-employed tax evaders? HMRC is much more sophisticated than many people realise. Their “Connect” computer system analyses data from countless sources, checking bank records, land registry information, and even social media to spot discrepancies between your lifestyle and reported income.
Research by the Pensions and Lifetime Savings Association (PLSA) suggests a couple in the UK needs an annual combined income of £61,000 after tax to have a retirement with few or no money worries, while a single person would need £44,000.
How many years of NI contributions do I need for a full pension?
To get the full UK State Pension under the new system (for those reaching State Pension age after April 2016), you generally need 35 qualifying years of National Insurance (NI) contributions, while 10 years are needed for any pension, and less than 10 means no State Pension. Some people with records before 2016 (who were "contracted out") might need more than 35 years, while others might get a pro-rata amount for 10-34 years, and voluntary contributions can fill gaps.
Is it worth paying voluntary class 2 NI contributions?
Yes, you should consider paying voluntary Class 2 NICs if your self-employed profits are below the Small Profits Threshold (£6,725/£6,845 depending on tax year) to protect your State Pension entitlement and avoid gaps in your National Insurance record, as this is cheaper than voluntary Class 3 NICs and secures qualifying years for benefits. It's worthwhile if you need more qualifying years for the full State Pension (35 years) or to reach the minimum 10 years for any entitlement, but not if you already have 35 years or are likely to get credits from other means like Child Benefit.
