This Statutory Instrument has been made in consequence of a defect in S.I. 2024/249 and is being issued free of charge to all known recipients of that Statutory Instrument.
2025 No. 288
SOCIAL SECURITY

The Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran's Relief) Regulations 2025

Made
Coming into force
These Regulations are made by the Treasury in exercise of the powers conferred by sections 5(1) and (4) to (6), 9A(7) and (8), 9B(4) and (5) and 175(3) of the Social Security Contributions and Benefits Act 19921 (“the Contributions Act”), sections 5(1) and (4) to (6), 9A(7) and (8), 9B(4) and (5) and 171(3) and (10) of the Social Security Contributions and Benefits (Northern Ireland) Act 19922 (“the Northern Ireland Contributions Act”), section 141(4) and 142(2) and (3) of the Social Security Administration Act 19923 (“the Administration Act”), section 129 of the Social Security Administration (Northern Ireland) Act 19924 (“the Northern Ireland Administration Act”), section 2(2) and (3) of the Social Security Act 19935 (“the 1993 Act”) and Article 4(3) and (4) of the Social Security (Northern Ireland) Order 19936 (“the 1993 Order”) and sections 6(6) and 8(4) to (8) of the National Insurance Contributions Act 20227 (“the NICA 2022”).
Regulations 3 and 4 are made as a result of the Treasury carrying out in the tax year 2024-25 a review of the general level of earnings in Great Britain in accordance with section 141(1) and (2) of the Administration Act8.

The Treasury have determined that, in relation to Great Britain, regulations 3 and 4 should be made under section 141 of the Administration Act to amend Part 1 of the Contributions Act by altering the rate of, and small profits threshold for, Class 2 contributions and the rate of Class 3 contributions.

Regulations 3 and 4 make provision for Northern Ireland which corresponds to that mentioned in relation to Great Britain in the preceding recital, in accordance with section 129 of the Northern Ireland Administration Act.

With a view to adjusting the level at which the National Insurance Fund stands for the time being and having regard to estimated benefit expenditure for the financial year ending with 31st March 2026, the Treasury think it expedient that regulation 7 should be made under section 2(2) and (3) of the 1993 Act.

With a view to adjusting the level at which the Northern Ireland National Insurance Fund stands for the time being and having regard to estimated benefit expenditure for the financial year ending with 31st March 2026, the Treasury think it expedient that regulation 8 should be made under Article 4(3) and (4) of the 1993 Order.

A draft of these Regulations was laid before Parliament in accordance with the provisions of section 176(1)(za), (zb) and (a) of the Contributions Act9, section 172(11ZA), (11ZB) and (11A) of the Northern Ireland Contributions Act10, sections 141(3) and 190(1)(a) of the Administration Act11, section 166(10A) of the Northern Ireland Administration Act12, section 2(8) of the 1993 Act, Article 4(8) of the 1993 Order13 and section 12(2) of the NICA 202214 and approved by a resolution of each House of Parliament.

Part 1General

Citation and commencement1.

These Regulations may be cited as the Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran's Relief) Regulations 2025 and come into force on 6th April 2025.

Part 2Rates, limits and thresholds for National Insurance Contributions

Interpretation2.

In this Part—

“the Act” means the Social Security Contributions and Benefits Act 1992;

“the Northern Ireland Act” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

Rate of and small profits threshold for Class 2 contributions3.

In section 11 of the Act15 and the Northern Ireland Act16 (Class 2 contributions)—

(a)

in subsection (4) for “£6,725” substitute “£6,845”;

(b)

in subsection (6) for “£3.45” substitute “£3.50”.

Amount of a Class 3 contribution4.

In section 13(1) of the Act17 and the Northern Ireland Act18 (Class 3 contributions) for “£17.45” substitute “£17.75”.

Amendment to the Social Security (Contributions) Regulations 20015.

(1)

The Social Security (Contributions) Regulations 200119 are amended as follows.

(2)

In regulation 1020 (earnings limits and thresholds)—

(a)

for “2024” substitute “2025”;

(b)

in paragraph (a) for “£123” substitute “£125”.

Amendment to the National Insurance Contributions Act 20226.

(1)

The National Insurance Contributions Act 2022 is amended as follows.

(2)

In section 6(4)21 (zero-rate contributions for armed forces veterans)—

(a)

in paragraph (b) for “2023-24.” substitute “2023-24;”;

(b)

in paragraph (c) for “2024-25.” substitute “2024-25;”;

(c)

after paragraph (c) insert—

“(d)

2025-26.”.

(3)

In sections 8(1) and (2)22 (upper secondary threshold for earnings: special tax site employees and armed forces veterans) for “and 6 April 2024” substitute “, 6 April 2024 and 6 April 2025”.

Part 3National Insurance Funds

Prescribed percentage of estimated benefit expenditure - Great Britain7.

Section 2(2) of the Social Security Act 199323 (payments into National Insurance Fund out of money provided by Parliament) has effect with respect to the tax year 2025-26 and the prescribed percentage of estimated benefit expenditure for the financial year ending with 31st March in that tax year shall be 5 per cent.

Prescribed percentage of estimated benefit expenditure - Northern Ireland8.

Article 4(3) of the Social Security (Northern Ireland) Order 199324 (payments into National Insurance Fund out of appropriated money) has effect with respect to the tax year 2025-26 and the prescribed percentage of estimated benefit expenditure for the financial year ending with 31st March in that tax year shall be 5 per cent.
Vicky Foxcroft
Anna Turley
Two of the Lords Commissioners of His Majesty's Treasury
Explanatory Note
(This note is not part of the Regulations)

These Regulations amend the Social Security Contributions and Benefits Act 1992 (c. 4) and corresponding provisions in the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) (“the Acts”), the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004) (“the Contributions Regulations”) and the National Insurance Contributions Act 2022 (c. 9) (“the NICA 2022”). The amendments have effect from 6th April 2025.

Regulation 3 increases the small profits threshold specified in section 11(4) of the Acts, which is the threshold over which Class 2 NICs are treated as paid from £6,725 to £6,845. It also increases the rate at which Class 2 National Insurance contributions (“NICs”) are payable by self-employed earners, specified in section 11(6) of the Acts, from £3.45 to £3.50 per week.

Regulation 4 increases the rate of voluntary Class 3 NICs, specified in section 13(1) of the Acts, from £17.45 to £17.75.

Regulation 5 maintains at the same level as the previous year the weekly earnings limits and thresholds specified in regulation 10 of the Contributions Regulations, which are used for determining liability to Class 1 NICs and entitlement to associated state benefits, with the exception of the lower earnings limit , under regulation 10(a), which is increased from £123 to £125.

Regulation 6 extends zero-rate contributions for armed forces veterans to the 2025-26 tax year, under section 6 of that Act. It also maintains at the same level as the previous year the upper secondary thresholds for earnings, and the prescribed equivalents for earners paid otherwise than weekly, for freeport tax site employees and armed forces veterans, specified in section 8 of the NICA 2022

Regulation 7 provides for section 2(2) of the Social Security Act 1993 (c. 3) to have effect for the tax year 2025-26. This allows money provided by Parliament to be paid into the National Insurance Fund up to a limit of 5 per cent of the estimated benefit expenditure for the financial year ending with 31st March 2026. Regulation 8 makes corresponding provision for Northern Ireland, by giving effect to article 4(3) of the Social Security (Northern Ireland) Order 1993 (S.I. 1993/592 (N.I. 2)).

In accordance with section 142(1) of the Social Security Administration Act 1992 (c. 5) a copy of the report by the Government Actuary, giving the Actuary's opinion on the likely effect on the National Insurance Fund of the making of these Regulations, was laid before Parliament with the draft of these Regulations. A copy of the report can be found at https://www.gov.uk/government/collections/uk-social-security-short-term-and-long-term-reports; this is also available to purchase from the TSO Shop on their website at https://www.tsoshop.co.uk/ or by telephone on 0333 202 5070.

A Tax Information and Impact Note has not been prepared for this instrument as it gives effect to previously announced policy and it relates to routine changes to rates, limits and thresholds. A Tax Information and Impact Note covering NICs thresholds and related changes to income tax thresholds (remaining at 2022-23 levels until 2027-28) is available at https://www.gov.uk/government/publications/the-personal-allowance-and-basic-rate-limit-for-income-tax-and-certain-national-insurance-contributions-nics-thresholds-from-6-april-2026-to-5-apr/income-tax-personal-allowance-and-the-basic-rate-limit-and-certain-national-insurance-contributions-thresholds-from-6-april-2026-to-5-april-2028 .