The Intergenerational Foundation has put forward a recommendation to the new Labour government, led by Prime Minister Andy Burnham, urging that individuals receiving the State Pension should be required to pay National Insurance contributions.
Currently, most people cease paying National Insurance once they reach State Pension age. This typically means that self-employed individuals stop paying Class 2 and Class 4 National Insurance contributions upon reaching this milestone. Specifically, Class 4 contributions end from 6 April after the tax year in which they reach State Pension age.
The foundation’s report argues that this exemption is becoming increasingly difficult to justify, as more people choose to work beyond State Pension age and often possess considerable pension or asset wealth.
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Under present rules, those who continue working after reaching State Pension age usually stop making National Insurance contributions. If overpaid, these contributions can be reclaimed. For example, someone who attains State Pension age on 6 September 2026 would cease Class 4 contributions from 6 April 2027 and would make their final payment by 31 January 2028, alongside their Income Tax.
Workers must provide their employer with proof of age-such as a birth certificate or passport-to ensure that National Insurance payments are halted. For those unwilling to share such documents, HM Revenue and Customs (HMRC) can issue a letter confirming the individual’s State Pension age status, which can be presented instead. To obtain this, individuals must write to HMRC explaining why they prefer not to disclose personal identification to their employer.