More than 13 million people across Great Britain have reached State Pension age and receive weekly payments of up to £241.30. Those reaching the official retirement age—currently rising from 66 to 67 between now and 2028—can stop working and claim their State Pension, defer it, or continue working while claiming it.
Tax Considerations for Working Pensioners
If you claim your State Pension while still employed, remember the Personal Allowance is frozen at £12,570 until April 2031. Any income above that threshold will be taxed. While deferring can boost annual State Pension payments by nearly £700 each year, many older workers may not realize that once they reach State Pension age, they no longer need to pay National Insurance Contributions (NICs) through their salary.
However, this income boost does not happen automatically. You must flag it to your employer, though HM Revenue and Customs (HMRC) can help. If you are an employee who has already reached State Pension age and are still paying NICs, you can claim the money back.
Guidance from GOV.UK
Guidance on GOV.UK explains how to stop paying NICs if you are an employee or self-employed. It states: “If you’re self-employed, your Class 2 National Insurance contributions will no longer be treated as paid. You stop paying Class 4 National Insurance from 6 April after you reach State Pension age. You only pay Income Tax if your taxable income—including your private pension and State Pension—is more than your tax-free allowances.”
How to Stop Paying National Insurance
If you continue working, you need to show your employer proof of your age to stop paying National Insurance. This can be a birth certificate or passport. If you do not want your employer to see these documents, HMRC can send you a letter to show them instead.
The letter will confirm that you have reached State Pension age and do not need to pay National Insurance. You must write to HMRC explaining why you do not want your employer to see your birth certificate or passport. HMRC may ask you to send your birth certificate or passport for verification if it does not have a record of your date of birth; certified copies are accepted.
New State Pension Payment Rates
The New State Pension is paid to men born on or after April 6, 1951, and women born on or after April 6, 1953. To receive the full amount, you need around 35 years of National Insurance Contributions, but you may need more if you were contracted out.
- Full weekly New State Pension rate 2026/27: £241.30
- Every four-week pay period in 2026/27: £965.20
Deferring Your State Pension
Deferring your State Pension can increase your weekly payments if you defer for at least nine weeks. Your State Pension increases by 1% for every nine weeks deferred, which works out to just under 5.8% for every 52 weeks. The extra amount is paid with your regular State Pension, but it could be taxed. Deferred State Pensions increase each year in line with the September Consumer Price Index (CPI) inflation rate, not the Triple Lock measure.
