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.
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.
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.