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Tuesday, 2 October 2023

Making sure you've stopped paying National Insurance

You pay National Insurance contributions throughout your working life. They build up your entitlement to the State Pension and to certain social security benefits. The type and level of contributions you pay depends on how much you earn and whether you're employed or self-employed. You stop paying them when you reach State Pension age.

National Insurance contributions up to State Pension age

If you work - either as an employee or self-employed - and your earnings are over a certain level you pay National Insurance contributions. You pay them from age 16 until you reach State Pension age.

If you're employed you pay Class 1 National Insurance contributions as a percentage of your earnings. If you're self-employed you pay Class 2 contributions at a flat weekly rate and Class 4 contributions annually, as a percentage of your taxable profits.

Changes to State Pension age

The age you receive your State Pension could be changing. To find out if you're affected, see the second link below, 'Calculating your State Pension age'.

What happens at State Pension age?

Once you're over State Pension age you don't have to pay Class 1 or Class 2 National Insurance contributions. If you carry on working you'll only have to pay them on any earnings that were due to be paid to you before you reached State Pension age.

If you continue in employment

If you stay in employment after State Pension age you'll need to provide your employer with proof that you've reached this age. This will allow your employer to stop deducting National Insurance contributions from your earnings. You can do this by showing them any of the following:

  • birth certificate
  • passport
  • certificate of age exception - further information below

If you continue in self-employment

If you stay in self-employment after you reach State Pension age you may still have to pay Class 4 National Insurance contributions. They're an annual charge and you may still have to pay them on any taxable profits for the year in which you reach State Pension age. You won't have to pay them from the beginning of the following tax year.

Certificate of age exception

The Pension Service issues a pack to customers approaching State Pension age giving information on age exemption. If you tell them that you're carrying on working when you claim your State Pension, a certificate of age exception will be sent automatically. If you don't get a certificate, for example if you put off claiming State Pension, you can either:

  • use your birth certificate or passport as proof of age
  • ask HM Revenue & Customs to send a certificate to you - see the third link below

A certificate of age exception can be on card or paper. Both are equally acceptable as proof of age.

If you think you've overpaid National Insurance contributions

You might find you've overpaid National Insurance contributions in certain situations. For example:

  • you carried on working after State Pension age and your employer continued to deduct Class 1 National Insurance contributions
  • you paid Class 4 National Insurance contributions on profits from self-employment for a tax year after the one in which you reached State Pension age
  • you paid Class 2 National Insurance contributions as a self-employed person when your earnings were below the Small Earnings Exception limit

If you think you may have overpaid read the separate guide below on how to claim back overpaid National Insurance contributions.

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