Budget 2025 announced NICs thresholds frozen until 2030-31

The government announced at Budget 2025 that the Income Tax Personal Allowance (PA) and Higher Rate Threshold (HRT), together with the National Insurance contributions (NICs) Upper Earnings Limit (UEL), Upper Profits Limit (UPL), Primary Threshold (PT) and Lower Profits Level (LPL), would be fixed for a further three years up to the 2030-31 tax year¹. The Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran's Relief) Regulations 2026, laid by HMRC on behalf of HM Treasury, give effect to the annual re-rating of NICs rates, limits and thresholds for the tax year beginning 6 April 2026¹.

The regulations set the NICs rates, limits and thresholds for 2026-27 only, and state that for future years these will continue to be set annually through the re-rating exercise as standard¹. The PT and LPL are fixed at £12,570 for 2026-27, and the UEL and UPL remain at £50,270¹. The annual UEL is fixed at £50,270 per annum, or £967 per week for secondary Class 1 NICs purposes¹. The Lower Earnings Limit rises from £125 to £129 per week from 6 April 2026, uprated by September CPI¹. The Class 2 Small Profits Threshold rises from £6,845 to £7,105 for 2026-27, and the weekly flat rate for Class 2 rises from £3.50 to £3.65¹. Class 3 voluntary payments rise from £17.75 to £18.40 per week from 6 April 2026¹.

For 2026-27, employees' primary Class 1 NICs are payable at 8% on earnings between the PT and the UEL, and at 2% above the UEL¹. Employers' secondary Class 1 NICs are payable at 15% on earnings above the Secondary Threshold, with no upper limit¹. Class 4 NICs for the self-employed are payable at 6% on taxable profits above the LPL up to the UPL, and at 2% on profits above the UPL¹. The government also announced at Budget 2025 that it would use the September CPI figure of 3.8% as the basis for uprating the Class 2 and Class 3 NICs rates, the Class 1 Lower Earnings Limit and the Class 2 Small Profits Threshold for 2026-27¹.

The regulations also extend the zero-rate relief on secondary Class 1 contributions for employers of qualifying veterans for the tax years 2026-27 and 2027-28¹. The relief means employers pay no NICs for the first year of a veteran's employment up to salaries of £50,270¹. It has been available since April 2021 and was scheduled to come to an end in April 2026¹.

The instrument also allows for payments of a Treasury Grant not exceeding 5% of the estimated benefit expenditure for the 2026-27 tax year to be made into the National Insurance Fund, and makes corresponding provision for Northern Ireland¹. Its extent and territorial application are the United Kingdom¹.

Why it matters for households

Freezing the PA, HRT, PT, LPL, UEL and UPL means these thresholds stay at their current cash levels while earnings rise, so more of a person's income falls above them. For employees, the 8% primary Class 1 rate applies to earnings between £12,570 and £50,270 in 2026-27, and 2% above that¹. For the self-employed, the 6% Class 4 rate applies to profits between £12,570 and £50,270, and 2% above¹. The freeze runs to 2030-31, after which the thresholds will be uprated by the September Consumer Prices Index¹. The government will maintain the NICs PT and LPL at £12,570 from April 2028 until April 2031, and the UEL and UPL at £50,270 over the same period, in line with the income tax higher rate threshold¹. The Secondary Threshold, reduced to £5,000 from the 2025-26 tax year at Autumn Budget 2024, will remain fixed at £5,000 up until 2030-31¹. The High Income Child Benefit Charge applies at thresholds that are separate from these NICs limits. The tax and rates and economy sections cover how thresholds and uprating work, including how inflation sets increases to benefits, State Pension and tax thresholds.

What happens next

The regulations set NICs rates, limits and thresholds for the 2026-27 tax year only, beginning 6 April 2026¹. The veterans' relief extension covers the tax years 2026-27 and 2027-28, described as a final two years until April 2028¹. The threshold freezes announced at Budget 2025 run up to the 2030-31 tax year, after which the thresholds will be uprated by September CPI¹.