Class 2 National Insurance for Self-Employed

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.

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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

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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

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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

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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

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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.

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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

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Checking Your NI Record

Why Check?

Your NI record determines your State Pension amount. Gaps could reduce your entitlement.

How to Check

1. Log into your Personal Tax Account at gov.uk
2. View your National Insurance record
3. See qualifying years and any gaps
4. 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.

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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.

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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.