Millions of older employees across Great Britain may be entitled to an instant pay boost simply by stopping unnecessary National Insurance Contributions (NICs) once they reach State Pension age.
Nearly 13 million people are currently of State Pension age and receiving weekly payments of up to £230.25. The official retirement age is 66, though this will gradually rise to 67 between 2026 and 2028. At this point, individuals can choose to retire and claim their pension, defer it, or continue working while also drawing it. What many do not realise, however, is that from age 66, most workers are no longer required to pay NICs on their earnings. This change is not always applied automatically, meaning employees must inform their employer to stop deductions — or risk missing out on extra income, the Daily Record reports. HM Revenue and Customs (HMRC) can also help workers ensure their pay is adjusted correctly.
Employees already beyond State Pension age who are still paying NICs may even be able to reclaim the money. Full details of how to do this and how to provide proof of age to your employer are outlined on GOV.UK.
Guidance also confirms that for self‑employed workers, Class 2 contributions are no longer treated as paid, and Class 4 NICs stop completely from the start of the tax year after reaching State Pension age. From then on, older workers only need to pay Income Tax if their total taxable income — including State Pension and any private pensions — exceeds the personal allowance, currently frozen at £12,570 until April 2028.
How to stop paying National Insurance
The guidance explains that if you remain in employment, you must provide your employer with evidence of your age to ensure you stop paying National Insurance – this can be achieved using a birth certificate or passport.
Nevertheless, if you prefer not to show your employer your birth certificate or passport, HMRC can provide you with a letter to present to them instead.
The letter will verify:
- You have reached State Pension age
- You do not need to pay National Insurance
You will need to contact HMRC in writing, explaining why you prefer not to show your employer your birth certificate or passport.
HMRC will request that you submit your birth certificate or passport for confirmation if it lacks a record of your date of birth – certified copies are acceptable.
Complete information on how to stop paying National Insurance from 66 and tax relief available for individuals over State Pension age can be located on GOV.UK here.
New State Pension payment rates
The New State Pension is distributed to:
- Men born on or after April 6, 1951
- Women born on or after April 6, 1953
To qualify for the full New State Pension, you must have contributed around 35 years’ worth of National Insurance Contributions, though the actual amount could be more or less depending on your situation. You can check your state pension forecast here.
Postponing or delaying claiming the State Pension
Postponing your State Pension could boost the weekly payments you receive when you choose to claim it, provided you defer for a minimum of nine weeks. Your State Pension rises by the equivalent of 1% for every nine weeks you defer, equating to just under 5.8% for every 52 weeks.
The additional amount is paid alongside your regular State Pension payment; however, it’s crucial to note that any extra payments you receive from deferring could be subject to tax.
It’s also vital to understand that deferred State Pensions increase annually in accordance with the September Consumer Price Index (CPI) inflation rate and not the highest measure of the Triple Lock policy.
