Class 2 National Insurance: Do You Still Pay It in 2026/27?
Class 2 National Insurance still exists, but since 6 April 2024 most self-employed people no longer pay it. The rule that catches people out is not the abolition itself. It is the assumption that because Class 2 "went away", your State Pension takes care of itself. For a sole trader with profits below the Small Profits Threshold, that assumption can quietly cost a qualifying year toward the pension. Here is who still pays Class 2 National Insurance in 2026/27, who is credited for free, and where the expensive mistakes are.
What changed on 6 April 2024
Class 2 was a flat weekly National Insurance contribution that self-employed people paid to build up entitlement to the State Pension and certain benefits. At the Autumn Statement in November 2023, the government removed the requirement to pay it from 6 April 2024. Class 2 was not deleted from the statute book, and the weekly rate still exists for anyone who wants to pay voluntarily. What changed is that HMRC now treats Class 2 as paid, for free, once your profits reach the Small Profits Threshold.
That single change created a set of half-true beliefs. Below are the ones worth correcting, because getting them wrong affects your pension record rather than just your tax bill. This is a companion to our fuller guide on self-employed National Insurance, which covers Class 4 in more depth.
"I still have to pay Class 2 every week"
Most self-employed people do not. For the 2026/27 tax year, if your profits are £7,105 or more (the Small Profits Threshold), HMRC states that Class 2 contributions are treated as having been paid to protect your National Insurance record. You pay nothing, and the year still counts. There is no weekly bill, no standing order, and nothing to set up.
If you kept paying by memory or left an old arrangement running after April 2024, you were paying for something HMRC already credits for free.
"Class 2 is gone, so my State Pension is safe"
This is the belief that costs the most, and it only bites one group: people whose profits fall below £7,105. Below the Small Profits Threshold you get no automatic credit. To keep that tax year as a qualifying year toward your State Pension, you have to pay Class 2 voluntarily.
The voluntary Class 2 rate for 2026/27 is £3.65 a week, which is £189.80 for a full year. Weigh that against what a qualifying year is worth. You need 10 qualifying years to get any new State Pension, and 35 for the full amount, which is £241.30 a week in 2026/27. One qualifying year is worth roughly £241.30 ÷ 35 = £6.89 a week, about £358 a year, for the rest of your retirement. Paying £189.80 once to secure income of around £358 every year for life is one of the clearest deals in the tax system.
If you have a low-profit year, a side business, or a first year of trading that stayed small, check whether you dropped below £7,105. If you did, deciding whether to pay voluntary Class 2 is the decision that matters.
"Paying Class 4 protects my pension"
It does not. Class 4 is the percentage charge on profits: for 2026/27 you pay 6% on profits between £12,570 and £50,270, and 2% above £50,270. It can run to thousands of pounds, but it is a tax. Class 4 contributions do not count towards the State Pension or any benefit. Only Class 2 counts for the self-employed, whether you pay it or it is treated as paid.
The practical consequence: a sole trader earning £45,000 pays a substantial Class 4 bill and still relies entirely on the free Class 2 credit for their pension. The Class 4 payment buys no pension entitlement at all.
"I have to pay Class 2 separately to HMRC"
You do not pay Class 2 or Class 4 on their own. Both are calculated and collected through your Self Assessment tax return, and paid alongside your income tax by 31 January after the tax year ends. For the 2025/26 tax year that deadline is 31 January 2027. Voluntary Class 2, for those below the Small Profits Threshold, is also paid through the return. When you file, make sure the return records the voluntary contribution, because that is what turns the year into a qualifying one.
"If I want to top up, I'll just pay Class 3"
Self-employed people below the Small Profits Threshold should pay voluntary Class 2, not Class 3. Class 3 is the voluntary class for people who are not self-employed, and it costs £18.40 a week in 2026/27, roughly five times the Class 2 rate. Both buy the same qualifying year. Paying Class 3 by mistake costs £956.80 for the year against £189.80 for Class 2, so £767 more for the identical result.
Class 2 and Class 4 by profit band, 2026/27
| Annual profit | Class 2 | Class 4 | Qualifying year for State Pension? |
|---|---|---|---|
| Below £7,105 | Not due; you can pay voluntarily at £3.65/week | Not due | Only if you pay voluntary Class 2 |
| £7,105 to £12,570 | Treated as paid, free | Not due | Yes, free |
| Above £12,570 | Treated as paid, free | 6% to £50,270, then 2% | Yes, from the Class 2 credit, not Class 4 |
The Class 2 dividing line is the £7,105 Small Profits Threshold. The £12,570 figure is the separate Lower Profits Limit, the point where Class 4 starts.
Why your profit figure decides which band you land in
Every band above turns on one number: your taxable profit, which is your income minus your allowable business expenses. Miss a few months of receipts and your recorded profit is too high, which can push you into a Class 4 bill you did not owe. Record your profit accurately and, in a lean year, you might find yourself below £7,105 and facing the voluntary Class 2 decision.
That is why keeping clean records matters here, not just at tax time. SparkReceipt captures receipts, categorises them against your allowable expenses, and produces a running profit-and-loss figure, so the number that decides your National Insurance band is one you can trust rather than reconstruct in January. You can see how it works on the expense tracker page, or start on the pricing page.
Frequently asked questions
Do I still need to pay Class 2 National Insurance?
If your self-employed profits are £7,105 or more in 2026/27, no. HMRC treats Class 2 as paid and the year counts toward your State Pension for free. If your profits are below £7,105, you can choose to pay it voluntarily to keep the year qualifying.
What is the Small Profits Threshold for 2026/27?
£7,105 a year. Reach it and your Class 2 contributions are treated as paid without you paying anything.
Is it worth paying voluntary Class 2 if my profits are low?
Usually yes. A full year costs £189.80, and one qualifying year adds around £358 a year to your State Pension for life once you reach pension age. Check your record first, because you only need to top up years you are missing.
Does paying Class 4 count towards my State Pension?
No. Class 4 is a tax on profits and gives no benefit entitlement. Your State Pension as a self-employed person comes from Class 2, paid or credited.
How do I pay Class 2 National Insurance?
Through your Self Assessment return, alongside your income tax, by 31 January after the tax year. Voluntary Class 2 for low-profit years is paid the same way.
What is the difference between Class 2 and Class 3 voluntary contributions?
Class 2 is for the self-employed and costs £3.65 a week for 2026/27. Class 3 is the general voluntary class and costs £18.40 a week. Both earn a qualifying year, so a self-employed person should use the cheaper Class 2.
Key takeaways
- Class 2 was not abolished; since 6 April 2024 it is treated as paid, for free, once profits reach the £7,105 Small Profits Threshold.
- The real risk is a low-profit year below £7,105, where you get no credit unless you pay voluntary Class 2 at £3.65 a week.
- A £189.80 voluntary year secures roughly £358 a year of State Pension for life, so it is worth checking your record.
- Class 4 is a tax on profits and builds no pension; only Class 2 counts toward the State Pension for the self-employed.
- Class 2 and Class 4 are both paid through Self Assessment by 31 January, not separately.
- If you need to top up a self-employed year, use Class 2, not the five-times-pricier Class 3.