UK National Insurance rates, thresholds: 6 April 2026

If you are budgeting for the new tax year, here is an important update. The Treasury has confirmed changes to National Insurance that take effect on 6 April 2026. The regulations were approved by both Houses of Parliament and signed on 3 March 2026, with the legal text published on legislation.gov.uk. We have read the instrument so you do not have to, and we will translate it into plain English with examples you can use.

The headlines are straightforward. For employees, the Lower Earnings Limit (the line where you start building entitlement to certain benefits) rises from £125 to £129 a week. For the self‑employed, the small profits threshold moves from £6,845 to £7,105. The Class 2 weekly rate becomes £3.65; the Class 3 voluntary rate becomes £18.40. Employer National Insurance relief for eligible armed forces veterans is extended to cover the 2026–27 and 2027–28 tax years. The National Insurance Fund for both Great Britain and Northern Ireland can receive a top‑up of up to 5% of estimated benefit spending in 2026–27 if required.

A quick refresher helps. Class 1 is what most employees and their employers deal with via payroll. Class 2 is for self‑employed people and links your profits to your National Insurance record for benefits like the State Pension. Class 3 is a voluntary top‑up you can choose to pay to fill gaps in your National Insurance record if you are eligible. Two bits of jargon to park: the ‘Lower Earnings Limit’ (LEL) is used mainly for deciding if you get National Insurance credits; the ‘small profits threshold’ is the profit level at which self‑employed people are treated as having paid Class 2 for benefits purposes.

Here is what changes for the self‑employed. From 6 April 2026, if your annual profits are at or above £7,105, you are treated as having paid Class 2 for benefits purposes. If your profits fall below £7,105, you can usually protect your record by paying Class 2 voluntarily (if you qualify) at the new £3.65 weekly rate. That “treated as paid” rule means many people will not physically pay Class 2 when they are over the threshold, but they still get the benefits credit. If you are under the threshold, paying Class 2 can be a lower‑cost way to keep a qualifying year compared with Class 3.

To show the difference, imagine two sole traders. Amira expects £7,200 profits in 2026–27. Because she is above £7,105, she will be treated as having paid Class 2 and should get the year on her record without writing a cheque. Ben expects £6,500 profits. He will not be treated as paid, so he should consider paying Class 2 at £3.65 a week to protect his State Pension record, which comes to roughly £190 for a full year. Always check your eligibility and current HMRC guidance before paying.

Class 3 also changes. From 6 April 2026 the voluntary rate is £18.40 a week. That is roughly £957 for a full year. People use Class 3 when they have gaps on their National Insurance record and cannot use Class 2 for that period. Before paying, look at your National Insurance record on GOV.UK and read the Government guidance or speak to HMRC, because not every gap needs to be filled and some years give you less value than others. Paying the cheaper Class 2 (if you qualify) is often better value than Class 3.

Employees will want to note the LEL shift. The new figure is £129 a week (about £559 a month, roughly £6,708 a year). If your weekly pay sits between the LEL and the main employee threshold, you build entitlement to certain benefits via National Insurance credits without paying employee contributions. The instrument keeps the other weekly earnings limits and thresholds used for Class 1 at last year’s levels; only the LEL moves. If you were earning £128 a week in 2025–26 you received credits; from April 2026 you would need to reach at least £129 to keep those credits in a given pay period, so do check your hours and pay frequency.

There is also targeted support for service leavers. Employer NIC relief for eligible armed forces veterans is extended to cover the 2026–27 and 2027–28 tax years, according to the National Insurance Contributions Act 2022 as amended by this instrument. In practice this means employers can continue to benefit from a zero rate of secondary Class 1 NICs on qualifying veteran earnings up to the relevant upper secondary threshold during the relief window. It is worth employers checking the exact qualifying rules and time limits in the HMRC guidance.

Freeport and other special tax site employees are unchanged on the technical cap that applies to those reliefs. The instrument keeps the upper secondary threshold for earnings for special tax site employees and for veterans at the same levels as last year, which means the point up to which the reduced employer rate or zero rate applies does not shift for 2026–27. If you payroll in a freeport, your software settings for those thresholds should roll forward.

You might wonder why the National Insurance Fund is mentioned. The rules allow the Treasury (and, in Northern Ireland, the Department of Finance) to pay money into the Fund to steady it. For 2026–27 the permitted top‑up is set at 5% of estimated benefit expenditure for the year ending 31 March 2027. That is not money taken from your payslip; it is an accounting power to ensure there is enough in the pot to meet benefit payments if needed.

Dates matter for planning. The regulations were made on 3 March 2026 and come into force on 6 April 2026. If you run payroll, make sure your first pay run on or after 6 April uses the new LEL while keeping other thresholds at last year’s levels. If you are self‑employed, factor the £7,105 small profits threshold into your 2026–27 forecasts and decide early whether you will rely on being treated as paid or plan to make Class 2 payments. If you have gaps on your record, compare Class 2 and Class 3 before paying.

If you want to read the source, the legal text is on legislation.gov.uk under ‘The Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2026’. The Government Actuary’s report was laid with the draft regulations, and background materials are available via GOV.UK, including a previously published Tax Information and Impact Note on thresholds and income tax interactions. As ever, this explainer is for learning; for personal decisions, check the official guidance or seek regulated advice.