National Insurance after State Pension age

Once you reach State Pension age, you stop paying employee National Insurance on your wages, even if you keep working and have not claimed your State Pension. Your employer should switch you to National Insurance category letter C, which has a nil employee rate. Your employer still pays its own 15 per cent on your earnings above £5,000 a year, and you still pay income tax as normal.

When it stops

State Pension age is currently 66. It is rising to 67 between 2026 and 2028 for people born on or after 6 April 1960, so your exact date depends on your date of birth; the gov.uk State Pension age checker gives it to the day. State Pension age explains the timetable.

Employee NI stops on pay you receive after you reach that age. If your birthday falls part way through a pay period, the payment date usually decides whether NI is taken that time. Your employer will normally ask for proof of age, such as a passport or birth certificate, before changing your category letter. Payroll records often already hold your date of birth, but it is worth asking HR a month or two ahead to confirm they will make the change.

What letter C means on your payslip

National Insurance category letters tell payroll which rates to apply. Most employees are on A, which charges 8 per cent between £242 and £967 a week and 2 per cent above. Category C is for employees over State Pension age:

	Category A	Category C
Employee NI	8% then 2%	nil
Employer NI	15% above £96 a week	15% above £96 a week

So on a salary of £30,000 a year, you would save the 8 per cent employee NI on £17,430 (the pay above £12,570), which is £1,394.40 a year. The National Insurance category letters guide lists the other letters you might see, and the take-home pay calculator shows the effect on your monthly pay.

What does not stop

Income tax continues at the usual rates. Your State Pension is taxable income too, even though it is paid without tax deducted. The full new State Pension is £241.30 a week, which is about £12,548 a year and uses almost all of the £12,570 Personal Allowance. If you work and draw the State Pension, HMRC usually collects the tax on it by reducing the allowance in your job’s tax code, so your job may be taxed almost entirely at 20 per cent or more. A much lower code after you start your State Pension is normally this adjustment, not a mistake.

Employer NI continues, which means employing you costs the organisation the same as before. Student loan deductions, if you still have a loan, also carry on through payroll.

Pensions and working past State Pension age

Reaching State Pension age does not stop you paying into a workplace pension. Whether you can keep building up benefits in the NHS, Teachers’, LGPS or Civil Service schemes, and on what terms, depends on the scheme and on whether you have already taken benefits from it. Auto-enrolment duties stop applying to workers over State Pension age, but most public sector schemes still let you join or stay in. Retire and return covers the rules for drawing a public sector pension and working again, and the scheme administrator can explain your own position.

Self-employed income

If you also have self-employed income, Class 4 National Insurance stops from the start of the tax year after the one in which you reach State Pension age. Class 2 contributions, now paid only voluntarily at £3.65 a week, are not paid for weeks after you reach State Pension age.

If NI is still being taken

Check the category letter on your payslip after your birthday. If it still shows A, or NI is still deducted:

1. Send payroll proof of your age and ask them to change your letter to C.
2. Ask for the employee NI taken since your State Pension age date to be refunded. If it is in the current tax year, payroll can usually correct it.
3. If the overpayment falls in an earlier tax year, or payroll cannot fix it, contact HMRC with your National Insurance number and your employer’s PAYE reference.

Your HMRC personal tax account shows your National Insurance record and the State Pension forecast that sits behind it, which is a good place to confirm your record is complete before you stop work for good.