Starting a new business? Get 40% off our accountancy services for 3 months! 😀

x

National Insurance Contributions finish when you reach state pension age, so you won’t pay NI on any pension payments or other income. You might still have to pay income tax though, if your taxable income exceeds the personal allowance.

NI for retiring self-employed people

It’s also worth keeping in mind that if you are self-employed and your earnings hit the threshold, then you may still have to pay Class 4 NI  for the tax year that you reach state pension age. When you retire, remember to let HMRC know that you have stopped working! You will need to send them your final Self Assessment tax return.
 

Comprehensive tax return services

From only £24.50 per month

Learn more

When does National Insurance start and stop?

National Insurance Contributions are payable from the age of 16 until state retirement age. The amount of NI that you have to pay depends on how much money you earn, and whether you’re employed or self-employed. Check the current NI rates and thresholds in our article.

 

You may pay the Health & Social Care Levy depending on when you stop work. Learn more about it here.

What happens if I retire early?

Some people retire before the retirement age. It might be possible to receive your company or personal pension early, – this is something that your employer or their pension scheme can advise you on. There might sometimes be tax implications for taking money out of your pension pot early, which is something to watch out for.

Even if you retire early, you won’t receive your state pension until you reach state retirement age. Early retirement might also mean that the amount of state pension you eventually receive is less. This is because you might not have made enough NI contributions. You can check your National Insurance record online to see how many qualifying years of contributions you have made.

Learn more about our online accountancy services for business here. To talk to one of the team, call 020 3355 4047, request a free call back, or get an instant online quote.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

More posts by this author
guest
2 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
jean wilson
jean wilson
27th July 2020 4:52 pm

I plan to retire at 60 in 2022. I have an NHS pension but can’t get my state pension until I’m 67. Will I still pay NI contributions until I get my state pension? I will have paid in 44 years of full NI contributions. Also will I pay tax on my lump sum from my NHS pension?

Elizabeth Hughes
Admin
Elizabeth Hughes
31st July 2020 9:25 am
Reply to  jean wilson

Hi Jean, thanks for your message. You don’t pay National Insurance contributions (NICs) on any payments that you receive from a pension scheme, including an annuity, but you may be liable to income tax on these payments. You will continue to pay NI on income such as employment and self employment until you reach state pension age. Pensions are taxable income, but you can take 25% tax free. Pension providers often issue a P60 and sometimes they deduct tax. There is a P55 form that can be filled in to reclaim tax on flexibly accessed pensions. It’s a bit of… Read more »

Read more posts...

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More

Succession Planning for Business Owners: What Comes Next?

When you own a business, it’s extremely normal to feel like you’re surviving one day to the next – ‘winging it’, as…

Read More

The Accountancy Partnership – Our Positive Reviews

Here at The Accountancy Partnership, we’re proud of our customer reviews The reviews we receive from our customers show how hard we…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?

Yes
No

Call us on 020 3355 4047 if you’re not sure.