Introduction
Class 2 National Insurance is a flat-rate weekly contribution paid by self-employed individuals. It's important because it helps build your entitlement to the State Pension and certain benefits.
What Is Class 2 NI?
Class 2 NI is a fixed weekly contribution for self-employed people. Unlike Class 4 NI (which is percentage-based), Class 2 is a small flat amount.
2025/26 Rates
- Weekly Rate: £3.45
- Annual Cost: £179.40 (52 weeks)
- Threshold: Only payable if profits exceed £12,570
Who Pays Class 2 NI?
You pay Class 2 NI if:
- You're self-employed (sole trader or partner)
- Your profits exceed £12,570 per year
- You're 16 or over and below State Pension age
Voluntary Payments
If your profits are below £12,570, you can choose to pay Class 2 voluntarily to:
- Build State Pension qualifying years
- Maintain entitlement to certain benefits
- Fill gaps in your National Insurance record
Why Class 2 NI Matters
State Pension Entitlement
Each year you pay Class 2 NI counts as a qualifying year for State Pension. You need 35 qualifying years for the full new State Pension (currently £221.20/week).
Benefits Access
Paying Class 2 helps maintain access to:
- Contributory Employment and Support Allowance (ESA)
- Maternity Allowance
- Bereavement benefits
How Class 2 Is Collected
Through Self Assessment
Class 2 NI is calculated and collected through your Self Assessment tax return. It's added to your tax bill and paid by 31 January.
Payment Timeline
For 2025/26 tax year:
- Tax year ends: 5 April 2026
- Filing deadline: 31 January 2027
- Payment deadline: 31 January 2027
Class 2 vs Class 4 NI
| Feature | Class 2 | Class 4 |
|---|---|---|
| Rate | £3.45/week flat | 6%/2% of profits |
| Threshold | £12,570 | £12,570 |
| Purpose | State Pension & benefits | General taxation |
| Amount | ~£179/year | Varies by profit |
Both are payable if profits exceed £12,570. They serve different purposes but are collected together.
Exemptions
You may be exempt from Class 2 if:
- Your profits are below £12,570 (optional to pay)
- You're over State Pension age
- You already have 35+ qualifying years for State Pension
- You're in certain employment already paying Class 1 NI
Checking Your NI Record
Why Check?
Your NI record determines your State Pension amount. Gaps could reduce your entitlement.
How to Check
- Log into your Personal Tax Account at gov.uk
- View your National Insurance record
- See qualifying years and any gaps
- Check forecast State Pension amount
Filling Gaps
You can usually pay voluntary Class 2 NI to fill gaps from the past 6 years. The cost is low compared to the pension benefit.
FAQs
What if I'm employed and self-employed?
If you pay Class 1 NI through employment, you may still owe Class 2 on self-employment profits (but it goes toward the same qualifying year).
Can I get a refund on Class 2?
Only if you've overpaid or were exempt. Voluntary payments are not refundable.
Is Class 2 worth paying if profits are low?
Usually yes - £179/year for a qualifying year toward State Pension is excellent value.
What if I'm a company director?
Directors of limited companies pay Class 1 NI through salary, not Class 2 or 4. Different rules apply.
Conclusion
Class 2 NI is a small but important contribution for self-employed individuals. At just £3.45/week, it's essential for building State Pension entitlement. Even if your profits are below the threshold, consider voluntary payments to protect your future pension.