When do you stop paying National Insurance? Why pensioners left out of Spring Statement | Personal Finance | Finance

National Insurance (NI) is a component of the welfare state in the UK that counts towards certain benefits and pensions. Though this is mandatory for workers aged 16 and over, there is a time when payments are no longer required.

NI payments must be made by people in the specified age category who are an employee earning above £184 a week (class one), or are self-employed and making a profit of £6,6515 or more a year (class two).

Self-employed people earning profits of more than £9,569 pay a higher rate of NI, which is essentially a profit-based tax. There is no attached benefit entitlement.

If you’re self-employed, you pay class two contributions at a flat weekly rate and class four contributions annually as a percentage of your taxable profits.

READ MORE: Here’s what the Spring Statement really means for YOU

However, once you reach a certain age, you are able to stop paying NI contributions.

According to Gov.uk: “You stop paying class one and class two contributions when you reach State Pension age – even if you’re still working.

“You’ll continue paying class four contributions until the end of the tax year in which you reach State Pension age.

“For example, you reach State Pension age on September 6, 2021. You’ll stop making class four contributions on April 5, 2022, and pay your final class four bill by January 31, 2023, together with your Income Tax.”

State Pension age depends on the year you were born.

According to Agues: “State Pension age is gradually increasing for men and women, and will reach 67 by 2028.

“State Pension age is going to be kept under review, which means that it could change again in the future, depending on different factors, such as changes in life expectancy.”

You’ll be able to claim the new State Pension if you’re a man born on or after 6 April 1951 or a woman born on or after 6 April 1953.

If you reached State Pension age before April 6, 2016, you will get the basic State Pension.

If you do continue working beyond State Pension age, Gov.uk advises people to show your employer proof of your age to ensure you stop paying NI contributions.

It adds: “If you do not want your employer to see your birth certificate or passport, HM Revenue and Customs (HMRC) can send you a letter to show them instead.”

In the letter, you must confirm you’ve reached State Pension age and you do not need to pay NI.

You’ll need to write to HMRC explaining why you do not want your employer to see your birth certificate or passport.

HMRC will ask for a copy of your birth certificate or passport for verification if there is no record of your date of birth.

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