HM Treasury has finalised the annual re‑rating of National Insurance for 2026/27. The instrument confirms changes to Class 2 and Class 3 rates, a higher Lower Earnings Limit for employees, an extension of employer relief for armed forces veterans, and payments into the National Insurance Funds. The rules take effect from 6 April 2026 following approval by both Houses. (statutoryinstruments.parliament.uk)
For self‑employed people, the small profits threshold for Class 2 moves from £6,845 to £7,105 and the weekly Class 2 amount increases from £3.50 to £3.65 from 6 April 2026. For those who choose to pay Class 2 voluntarily, this equates to £189.80 for a full year. (legislation.gov.uk)
Since 6 April 2024 most self‑employed individuals with profits above £12,570 have not been required to pay Class 2, while those with profits between the small profits threshold and the lower profits limit continue to receive a National Insurance credit. The 2026/27 re‑rating does not change those policy points; it updates the threshold and weekly rate. (gov.uk)
Voluntary Class 3 contributions, used to fill gaps in a record, rise from £17.75 to £18.40 a week from 6 April 2026. On a full‑year basis this is £956.80, an increase of £33.80 compared with 2025/26. (legislation.gov.uk)
For employees, the Lower Earnings Limit increases to £129 per week (monthly £559; annual £6,708) while other Class 1 earnings thresholds remain at last year’s levels. The LEL sets the minimum pay at which a week counts towards contributory benefits; employees earning below it will not build contribution records via Class 1 in that pay period. (gov.uk)
Employer National Insurance parameters are otherwise unchanged by this instrument. HMRC guidance confirms Class 1A and Class 1B rates at 15% for 2026/27, with the secondary threshold and upper secondary thresholds aligned to previously legislated values. Payroll teams should ensure software reflects the updated LEL and existing category‑specific thresholds. (gov.uk)
The instrument extends the zero‑rate of employer NICs for employing armed forces veterans to the 2026/27 and 2027/28 tax years and maintains the upper secondary thresholds for veterans and for Freeport/Investment Zone employees at their existing levels. The effect is to preserve the relief framework for new qualifying employments starting in those years. (legislation.gov.uk)
With a view to fund stability, the Treasury authorises payments into the Great Britain and Northern Ireland National Insurance Funds for 2026/27 up to 5% of estimated benefit expenditure for the year ending 31 March 2027. This is a standard mechanism to adjust fund positions when required. (legislation.gov.uk)
The Treasury states that the re‑rating of certain NICs limits and rates follows its statutory review of the general level of earnings under section 141 of the Social Security Administration Act 1992. The Government Actuary’s Department report on the likely impact on the Funds was laid with the draft instrument. (legislation.gov.uk)
Operationally, employers should apply the new LEL from pay periods on or after 6 April 2026 and continue to use the existing primary, secondary and upper secondary thresholds unless employing categories that benefit from the extended veterans relief. Self‑employed taxpayers filing Self Assessment for 2026/27 will see the updated Class 2 weekly amount for any voluntary payments. (gov.uk)
For Northern Ireland, the instrument makes corresponding changes to ensure consistent treatment across the UK, including the 5% top‑up to the Northern Ireland National Insurance Fund. Cross‑jurisdiction employers should note that the effective dates and parameters are aligned. (legislation.gov.uk)
HM Treasury notes no separate Tax Information and Impact Note has been prepared for this instrument because it implements previously announced policy. A standing TIIN covering the maintenance of certain NICs thresholds from 6 April 2026 to 5 April 2028 remains available for reference on GOV.UK. (legislation.gov.uk)