Class 2 National Insurance

Class 2 National Insurance was a flat-rate weekly contribution paid by sole traders — £3.45 a week in 2023-24, £3.50 in 2025-26, and £3.65 in 2026-27 when paid voluntarily. It sat alongside profit-based Class 4 NI and helped fund state pension and benefits.

From April 2024, mandatory Class 2 was effectively abolished. If your self-employment profits are at or above the small profits threshold (£6,725 in 2024-25, £6,845 from 2025-26), you pay nothing but still get a qualifying year toward your state pension — treated as if you'd paid.

Below the threshold, you can pay Class 2 voluntarily through Self Assessment. For most people it's worth doing: a year's worth of Class 2 buys a qualifying year of state pension that would otherwise cost many times more through Class 3 voluntary contributions.

Class 2 is separate from Class 4 NI (which is profit-based and still mandatory on profits above £12,570). Both are collected through Self Assessment alongside income tax.

Related terms

• Class 4 National Insurance — NI for sole traders — 6% main rate on profits between £12,570 and £50,270, 2% above.
• Self Assessment — HMRC's system for declaring income not taxed at source — filed annually by the self-employed, landlords, and many directors.
• Payments on account — HMRC advance tax payments — half your prior-year bill, due 31 January and 31 July.