Do pensioners pay National Insurance?

Full answer

**National Insurance ceases at State Pension age.** The current State Pension age is **66** for both men and women. From the week you reach 66, you no longer pay: - **Class 1** employee NI on employment earnings - **Class 4** NI on self-employment profits - **Class 2** NI (abolished April 2024, but was also exempt post-SPA) **Employer NI still applies:** Even though you stop paying employee NI, your employer still pays **employer's Class 1 NI at 15%** on your salary above £5,000/year. So the employer's cost remains unchanged. **Income tax on pension income:** Retirement income is still subject to **income tax** in the normal way: - State Pension is taxable income (but paid gross — HMRC adjusts your tax code to collect it via other income sources such as a private pension or employment) - Occupational/workplace pension: taxed via PAYE, provider deducts tax - Personal pension/annuity income: taxed via PAYE - The **Personal Allowance** of **£12,570** still applies — you pay no income tax on pension income below this **State Pension and tax code:** Because the State Pension (£241.30/week = £12,547.60/year in 2026/27) is close to the Personal Allowance, pensioners with any additional income above ~£23/year will owe income tax. HMRC typically adjusts the tax code on a private pension to collect the tax due on the State Pension. **Checking your tax code:** If you receive multiple pension sources, check your PAYE coding notice (P2) via the HMRC Personal Tax Account to ensure your allowances are correctly allocated and you're not being overtaxed.

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Related guides

• Pension Contribution Guide