National Insurance classes explained: what they mean for your State Pension

National Insurance is divided into six classes, each covering different types of work and income. Class 1 is paid by employees on earnings above the Lower Earnings Limit, with rates of 8% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270. Class 1A and 1B are paid by employers on benefits and special types of payment. Class 2 is a flat-rate contribution for self-employed people: since April 2024, if your profits are above the Small Profits Threshold (£7,105 in 2026-27) it is treated as paid without you paying anything, and if they are below it you can pay voluntarily at £3.65 per week. Class 4 is paid by self-employed people at 6% on profits between £12,570 and £50,270 and 2% above. Class 3 is a voluntary contribution for people who want to fill gaps in their National Insurance record, currently at £18.40 per week. Each class counts differently toward your benefit entitlement, and your Class 2 contributions are particularly important for your State Pension.

Your National Insurance record is the foundation of your State Pension entitlement. To receive the full new State Pension (£241.30 a week, about £12,548 a year, in 2026-27, paid from State Pension age), you need 35 complete years of National Insurance contributions. Each missing year reduces your State Pension unless you fill it, and you can usually only fill gaps from the last six tax years. For employees, gaps are less common because Class 1 is automatically deducted from your salary. For self-employed people, a year with profits below the Small Profits Threshold will not count unless you pay voluntary Class 2. Check your National Insurance record for free on the HMRC app or Gov.uk to see whether you have any gaps that need filling.

If your National Insurance record has gaps, you have two options for filling them. Class 3 voluntary contributions cost £18.40 per week (2026-27 rates) and count toward your State Pension, making them a worthwhile investment if you are close to 35 years and missing a few. Voluntary Class 2 contributions at £3.65 per week are cheaper but only available in limited cases, mainly if you were self-employed with profits below the Small Profits Threshold. You can typically only go back six years to fill gaps, though HMRC sometimes allows longer if you had a reasonable excuse. Check your record annually, especially after career breaks, periods of self-employment with low profits, or employment where you were misclassified as self-employed. The full new State Pension is £241.30 per week in 2026-27, so each missing year costs about £6.89 a week (around £358 a year, or roughly £3,580 over 10 years of retirement).