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Have you reached the State Pension age but are opting to stay in the workforce? Then the obligation to make National Insurance Contributions (NICs) is generally lifted.

Class 1 and Class 2 NIC payments are no longer mandatory once you’ve reached the State Pension age. However, any outstanding NICs, before hitting the state pension age, must still be paid. If you are choosing to continue working beyond State Pension age, you will need to confirm proof of age with your employer. It’s important to note that employers are still liable for paying secondary Class 1 employer NICs.

If you do not want to provide proof of your age to your employer, you can request an ‘age exception certificate’ from HMRC. It will provide confirmation that you’ve reached the State Pension age and are no longer required to make NIC payments.

For those of you who are self-employed, Class 4 NICs are due for the remaining part of the year in which State Pension age is reached. However, an exemption from Class 4 NICs is granted starting the subsequent year.

HMRC offer the following scenario to illustrate these requirements. Assuming an individual reached State Pension age on September 6 2023, their Class 4 contributions will cease on April 5 2024. The final Class 4 payment, along with any pending Income Tax, is due by January 31 2025.

Any overpaid NICs may be reclaimed from HMRC.

If you would like any support with your personal or business accounts, including your employees payroll, please contact a member of the CB Reid team.