National Insurance is Changing (Again): A Purr-fect Guide to What’s New in 2025/26 and 2026/27

National Insurance. Two words that can make even the most composed person let out a low growl—not unlike your cat when you try to move them off your laptop. And just like your furry overlord, National Insurance contributions are always there, lurking silently, occasionally leaping out of nowhere to claw a few pounds from your payslip.

But now, big changes are afoot in the world of NI for the 2025/26 and 2026/27 tax years. So curl up, get comfy, and let’s pounce on the key updates—with whiskers, wit, and a warning not to knock your coffee off the desk while we explain.

A Quick Scratch Behind the Ears: What Is National Insurance?

In case you’ve been too busy watching your cat zoom across the room at 3 a.m., here’s a quick refresher. National Insurance (NI) is a tax paid by workers and employers in the UK to fund state benefits like the NHS, state pension, and that mysterious entity known as “administrative costs.”

NI comes in “classes”—not to be confused with yoga classes (although both can stretch your patience). Employees usually pay Class 1, the self-employed juggle Class 2 and Class 4, and there are other classes you probably never knew existed, like the elusive Class 3 (voluntary, for when you just can’t get enough of contributing to society).

2025/26: Catnip for Workers?

Here’s where it gets interesting. From April 2025, the government has once again tweaked NI rates. Why? Possibly to simplify the system. Possibly to win popularity points. Or possibly because HMRC’s spreadsheet got bored and started playing Sudoku with tax bands.

Key Changes for Employees (Class 1 NI):

• Main rate of Class 1 NI contributions (employee):Reduced from 10% to 8% on earnings between the primary threshold and the upper earnings limit.

That’s right—your payslip just got a tiny boost! Not enough for a penthouse suite, but maybe enough for your cat’s fourth velvet scratching post.

For context: in 2023/24, this rate was 12%, and by 2024/25 it had already dropped to 8%. So yes, we’re on a slippery slope of delight—like a cat sliding off a polished windowsill.

What Does That Mean in Real Life?

If you earn £35,000 a year, this change should leave an extra £400–£500 in your pocket annually. That’s:

• A few tanks of fuel,

• Or a modest holiday,

• Or roughly 1.7 million cat treats (bulk bought on offer).

Self-Employed Folk: It’s Raining Kibble

HMRC is also trying to declutter things for the self-employed—who’ve traditionally had to do a feline-level balancing act with both Class 2 and Class 4 NI.

What’s New for You?

Class 2 NI – Being Phased Out (Again)

If you’re self-employed and earn over the Small Profits Threshold, you won’t need to pay Class 2. But! You’ll still get National Insurance credits, meaning your state pension won’t be affected.

So you still get the ball of yarn without having to chase it. Win-win.

Translation: you’ll be paying less NI while still contributing enough to make future-you purr with contentment during retirement.

2026/27: Will There Be More Changes?

So far, the government has played its NI cards close to the litterbox—sorry, chest. The changes announced as of now apply firmly to 2025/26, and there’s a sense that simplification is the theme.

Expect:

• Further alignment of self-employed and employed NI structures (maybe even a single system one day—like a magical cat that doesn’t ignore you).

• More clarity around the abolition of Class 2—right now, we’re in that weird phase where it’s “mostly gone but not entirely.”

So for 2026/27, stay tuned. Things may stay stable. Or they may go full laser pointer again.

Final Thoughts: Be Curious, Not Cat-atonic

Tax changes can feel like trying to brush a long-haired cat who’s already spotted the brush—chaotic, ungraceful, and filled with suspicious hissing. But the National Insurance updates coming in 2025/26 are largely positive: lower rates, simplified systems, and a bit more cash in your paw.

Keep an eye on the horizon, speak to your accountant (or trusted financial feline whisperer), and remember: knowledge is power, especially when it means more tuna tins per paycheck.

Until next time—stay curious, stay compliant, and never trust a cat who’s too quiet near your tax documents.