Class 2 National Insurance Explained
A flat-rate weekly NI contribution for self-employed people. Since April 2024 it is treated as paid if your profits are at or above the Small Profits Threshold. Below it, paying voluntarily at £3.65 per week (£189.80/year) is one of the cheapest ways to build qualifying years for your State Pension.
What is Class 2 NI?
Class 2 National Insurance is the flat-rate contribution for self-employed individuals. Unlike Class 1 NI (which employees pay as a percentage of earnings), Class 2 is a flat rate of £3.65 per week for 2026-27. It counts toward your qualifying years for the State Pension and entitles you to certain benefits like Maternity Allowance.
Since 6 April 2024, if your self-employment profits are at or above the Small Profits Threshold (£7,105 in 2026-27), you do not pay Class 2: your contributions are treated as paid, so your NI record is protected. If your profits are below £7,105, you pay nothing, but you can pay Class 2 voluntarily. If your profits exceed £12,570, you pay Class 4 NI.
How it works
Class 2 NI is handled through your Self Assessment tax return, not monthly through PAYE. If your profits are at or above £7,105, nothing is added to your bill and the year is recorded as paid. If they are below £7,105 and you choose to pay voluntarily, £189.80 for the year is added to your Self Assessment bill.
If you are also employed and your salary already gives you a qualifying year through Class 1 NI, a voluntary Class 2 payment on low self-employed profits does not add anything to your State Pension record for that year.
Real example
Dan runs a small freelance design business with annual profits of £25,000. His NI bill breaks down as:
| Class | Amount |
|---|---|
| Class 2 (treated as paid, profits above £7,105) | £0 |
| Class 4 (6% on £12,430) | £745.80 |
| Total NI | £745.80 |
Dan pays nothing for Class 2, yet because his profits are above the Small Profits Threshold the year still counts as a full qualifying year toward his State Pension. He needs 35 qualifying years for the full new State Pension of £241.30 per week.
Who does this affect?
All self-employed individuals registered with HMRC. This includes sole traders, freelancers, and partners in business partnerships. If your profits are below £7,105 (for example a small side business), you may want to pay Class 2 voluntarily to protect your pension record, especially if you have no employment earnings giving you a qualifying year.
HMRC source
gov.uk/self-employed-national-insurance-rates covers Class 2 and Class 4 rates, thresholds and payment methods.
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