Spring Budget 2026: National Insurance Changes Explained

Quick answer

The Spring Budget 2026 made no changes to National Insurance rates or thresholds. The 2025/26 settings carry into 2026/27 unchanged:

This is Part 2 of 5 in our Spring Budget 2026 series — see Part 1 on income tax if you missed it.

What the Chancellor didn't change

Pre-Budget speculation included:

• Cutting employee NI further (from 8% to 6%) — did not happen. Treasury maths didn't support a further cut after the 2024 reductions.
• Reversing the employer NI rise from 15% back to 13.8% — did not happen. The £20 billion+ revenue from the April 2025 rise is now baked into spending plans.
• Aligning Class 4 self-employed NI with Class 1 employee NI at 8% — did not happen, though it remains a long-running policy idea.

Why the employer 15% rate matters even if it's "not your tax"

Employer NI doesn't show on your payslip but it shapes:

• Pay rise sizes — every £1,000 pay rise costs your employer roughly £1,150 once NI is added. Many employers point to this when negotiating.
• Salary sacrifice attractiveness — schemes that reduce gross salary (EV, pensions) save the employer 15% NI as well as saving you tax + employee NI. Some employers pass this saving back as enhanced contributions.
• Hiring decisions — at the margin, the higher rate makes new hires more expensive vs overtime for existing staff.

The Employment Allowance at £10,500/yr lets eligible small employers reduce their NI bill — broadly, those with employer NI under £100,000 in the previous tax year.

Worked example — £45,000 employee 2026/27

For a £45,000 PAYE worker in 2026/27, both income tax (frozen) and NI (frozen) are unchanged:

(Excludes pension, student loan, etc.)

In the same role in 2024/25, NI took £2,594 too — but on a lower headline salary that had not yet been pay-rise adjusted. Real-terms, the NI bite is identical; the fiscal drag effect is hidden by salary movements.

Self-employed — what stays, what's gone

Class 2 effectively abolished (from April 2024)

This is the bigger structural change in recent years. Self-employed sole traders no longer pay weekly Class 2 (£3.45/wk in 2023/24) — but still qualify for State Pension years automatically if profits exceed:

• Small Profits Threshold (£6,725 for 2025/26) — auto-credited.
• If profits are below £6,725, you can pay voluntary Class 2 at £3.45/wk to retain qualifying years. Available via Self Assessment.

Class 4 unchanged

A sole trader on £40,000 of profit pays Class 4 NI of £1,646. Plus income tax of £5,486. Plus £0 Class 2 (auto-credited). Total NI + IT: £7,132 — comparable to a PAYE employee on £40k earning £6,486 income tax + £2,194 NI = £8,680 (the self-employed pay less NI partly to offset lack of employee benefits).

Voluntary Class 3 — gap-filling for State Pension

If you have missing years in your NI record (gap years from time abroad, low earnings, education), you can:

• Buy voluntary Class 3 contributions at £17.45/week (£907.40/year for a full year).
• Each year purchased adds about £329/year to your eventual State Pension.
• The payback period is roughly 2.75 years — anyone living past their 70th birthday wins.

The 2023 budget extended the deadline to fill gaps all the way back to 2006/07 through to 5 April 2025, then re-extended in 2025 to 5 April 2027 for certain categories. Check your NI record at gov.uk before paying — many people have gaps they didn't know about.

What's missing — and what to watch for

The pre-Budget rumour mill suggested several reforms that didn't make this Budget:

1. Merging income tax and NI — long-discussed, never enacted. Would require parallel changes to bands, pension contributions, and a vast rebuild of HMRC systems.
2. Cutting Class 4 (self-employed) NI to match the favoured tax treatment many sole traders argue for vs limited companies.
3. Lifting the £5,000 employer NI threshold — a small-business push, didn't make it.

The Autumn Statement 2026 (typically late November) is the next opportunity for NI changes. Watch for hints in the Spring Statement document (a fiscal forecast in March, not a Budget) or the OBR's October forecast.

Workers above State Pension age

If you're employed past your State Pension age (currently 66, rising to 67 from 2028):

• Employee NI: 0% — you stop paying.
• Employer still pays 15% on your earnings — your employer doesn't get a discount.
• Tax code: NT or modified to reflect this.

This makes State Pension age + part-time work a particularly tax-efficient combination — Personal Allowance + 0% NI + State Pension.

Coming next in the series

• Part 3: Pensions, ISAs and savings
• Part 4: Housing, SDLT and the property market
• Part 5: Business taxes and the self-employed

Sources

• HMRC: National Insurance rates and categories 2025/26
• HMRC: Employment Allowance
• HMRC: Voluntary National Insurance contributions
• HM Treasury: Spring Budget 2026 (full document)
• OBR Economic and fiscal outlook (March 2026)