People of pension age could be due extra cash support from DWP | Retirement | Finance
You may not realise this National Insurance rule applies to you even if you keep working (Image: Getty)
Brits reaching State Pension age could be eligible for a boost from the Department for Work and Pensions (DWP), even if they choose to continue working. Once you reach 66, there’s no longer a requirement to pay National Insurance Contributions, even if you’re still employed.
Around 13 million people in the UK, who have reached State Pension age, receive weekly payments of up to £230.25 from the DWP.
Upon hitting the official retirement age – currently 66 but set to gradually rise to 67 between 2026 and 2028 – one has the option to retire and claim their State Pension, defer it, or continue working while also claiming it.
If you’re considering claiming your pension whilst still in employment, remember that the Personal Allowance is frozen at £12,570 until April 2030, and any income above this limit will be taxed.
Although deferring can increase annual State Pension payments by over £600 each year, many older workers may not be aware that from the age of 66, they are exempt from paying National Insurance Contributions (NICs) through their salary.
Nearly 13 million people across Great Britain are of State Pension age (Image: Getty)
However, as highlighted by the Daily Record, this increase in income doesn’t happen automatically and needs to be communicated to your employer. Help can also be obtained from HM Revenue and Customs (HMRC).
Employees who have attained State Pension age yet continue contributing National Insurance can reclaim these payments. Official guidance available on GOV.UK outlines the procedure for ceasing NIC deductions, whether you’re employed or working for yourself.
The guidance states: “If you’re self-employed, your Class 2 National Insurance contributions will no longer be treated as paid. You stop paying Class 4 National Insurance from 6 April (start of the tax year) after you reach State Pension age.
“You only pay Income Tax if your taxable income – including your private pension and State Pension – is more than your tax-free allowances (the amount of income you’re allowed before you pay tax).”
Read more: DWP urged to change State Pension inheritance rules
Read more: Thousands of pensioners missing out on £4,300 boost from DWP
How to stop National Insurance payments
The official documentation makes clear that workers remaining in employment need to furnish their employer with age verification to halt National Insurance deductions – either a birth certificate or passport will be acceptable.
If you’d rather not present your birth certificate or passport to your employer, HMRC can alternatively provide a letter serving this function.
The correspondence will confirm:
- You have reached State Pension age
- You do not need to pay National Insurance
Bear in mind that you must write to HMRC, explaining why you’re reluctant to show your birth certificate or passport to your employer. In instances where HMRC does not have a record of your date of birth, you will be required to provide either your birth certificate or passport for verification – certified copies are deemed acceptable.
Detailed information about stopping National Insurance contributions from the age of 66 and tax reliefs available for those beyond State Pension age can be found on GOV.UK here.
