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National Insurance and tax after State Pension Age

11 January 2024

Upon reaching State Pension age, most individuals working no longer pay National Insurance Contributions. Employers remain liable, and exemptions apply for the self-employed. Claim overpaid NICs back from HMRC.

If you have reached the State Pension age and continue to work, in most cases, you no longer need to pay National Insurance Contributions (NICs).

At State Pension age, the requirement to pay Class 1 and Class 2 NICs ceases. However, you will remain liable to pay NICs due to be paid to you before reaching the State Pension age. If you continue working, you need to provide your employer with proof of your age.

Your employer remains liable to pay secondary Class 1 employer NICs. If you would rather not provide proof of age to your employer, you can request a letter. This letter is known as an age exception certificate from HMRC. It is a letter confirming you have reached State Pension age and are no longer required to pay NICs.

If you are self-employed you will need to pay Class 4 NICs for the remainder of the year in which you reach State Pension age but will be exempt from the following year.

HMRC provides the following example. Someone who reached the State Pension age on 6 September 2023 will stop making Class 4 contributions on 5 April 2024 and pay their final Class 4 bill by 31 January 2025, together with any Income Tax due.

If you have overpaid National Insurance Contributions you can claim the excess back from HMRC.

Source: HM Revenue & Customs Tue, 09 Jan 2024 00:00:00 +0100

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