Continuing to work after reaching State Pension age can affect your National Insurance position, although your Income Tax obligations generally remain unchanged.
Once you reach State Pension age, you will normally stop paying employee National Insurance contributions (Class 1 NICs) on employment income. However, employers remain liable to pay employer (secondary) Class 1 NICs in the usual way.
If you are employed, your employer may require evidence that you have reached State Pension age before stopping employee National Insurance deductions. This can usually be satisfied by providing proof of age, such as a passport or birth certificate. Alternatively, confirmation can be obtained from HMRC (commonly referred to as an age exception certificate).
For self-employed individuals, Class 2 National Insurance contributions are no longer mandatory following changes introduced from 6 April 2024. In addition, liability to Class 4 National Insurance contributions ends from the start of the tax year following the tax year in which State Pension age is reached. For example, if State Pension age is reached during the 2026/27 tax year, Class 4 NICs would continue to apply until 5 April 2027 and would cease from 6 April 2027.
Although National Insurance contributions may no longer apply, Income Tax continues to be payable where total taxable income exceeds the available Personal Allowance.
Individuals should also continue to meet any reporting obligations, including submitting a Self Assessment tax return where required. Where excess tax or National Insurance has been paid, it may be possible to reclaim the overpayment from HMRC.
