PLEASE NOTE: The charity TaxAid advises only those people on low incomes whose problems cannot be resolved with HMRC.

National Insurance and State Pension Age

National Insurance

From state pension age, National Insurance is no longer payable, but the position can seem complex.

The first point to check is that you know your state pension date. This is important even if you do not draw your state pension at once. You can check your state pension date at:

Pension age checker – https://www.gov.uk/state-pension-age
State pension timetable – https://www.gov.uk/government/publications/state-pension-age-timetable

Once you know your pension date, there are three main issues:

1) Checking that you are not paying National Insurance past pension age as an employee

2) Checking your National Insurance position after state pension age for the self-employed

3) Paying voluntary contributions after pension age

Checking that you are not paying National Insurance past pension age as an employee

As an employee you should stop paying National Insurance when you reach state pension age. The employer, however, still makes secondary (employer’s contributions). If you reach state pension age and your employer is still deducting National Insurance from your pay, you should contact the employer bringing evidence of your age, such as a birth certificate, passport or a certificate of age exception from the Pension Service.

Checking your National Insurance after state pension age for the self-employed

When you reach state pension age you are no longer liable to pay class 2 National Insurance. Class 2 is paid through your self-assessment tax return.

If your self-employed profits exceed the lower earnings limit for class 4 (£8,060 for 2016-17 and 2015-16), you will pay class 4 National Insurance in the tax year in which you reach state pension age (as class 4 is based on profits for a tax year), but not for the following year.

Paying voluntary contributions after pension age

You cannot choose to continue to pay National Insurance on earnings after state pension age, but you may have an opportunity to pay contributions for some previous years. Normally you may make voluntary contributions for up to the last 6 years, if for any reason you have not obtained a full years contributions for any of these years.

If you have been self-employed and have not paid sufficient contributions (perhaps because your profits were low and you had a Small Earnings Exception / profits were below the Small Profit Threshold), it will be cheaper to pay voluntary class 2 contributions (as self-employed) rather than voluntary class 3 contributions.

In some cases, you may be able to pay additional  contributions after reaching state pension age – see https://www.gov.uk/voluntary-national-insurance-contributions/deadlines.