What is Class 2 National Insurance?

Full Definition

Class 2 National Insurance was historically a flat-rate weekly contribution paid by self-employed individuals, collected alongside Class 4 contributions through Self Assessment, and was the mechanism by which self-employed people built entitlement to contributory state benefits including the State Pension, Maternity Allowance, and Bereavement Support Payment. Prior to reform, self-employed people with profits above the Small Profits Threshold paid Class 2 at a flat weekly rate, while those below the threshold could pay voluntarily to protect their benefit entitlement. From 6 April 2024, mandatory Class 2 contributions were abolished for self-employed people with profits above the Lower Profits Limit (£12,570 for 2026/27) -- these individuals now get access to contributory benefits, including qualifying years for the State Pension, automatically and without having to actually pay Class 2, provided their profits exceed the Lower Profits Limit. Self-employed people with profits between the Small Profits Threshold (£6,845 for 2026/27) and the Lower Profits Limit can choose to pay Class 2 voluntarily to build entitlement, at a rate of £3.50 per week for 2026/27. Those with profits below the Small Profits Threshold can also pay Class 2 voluntarily on the same basis if they wish to fill a gap in their National Insurance record. This reform effectively ended Class 2 as a compulsory tax while preserving it as a low-cost voluntary top-up route, and it is generally far cheaper per qualifying year than paying voluntary Class 3 contributions, which is why low-profit self-employed individuals are often advised to check whether paying voluntary Class 2 is available and worthwhile before considering Class 3.

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