State Pension and NI

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CFrog
CFrog Posts: 86 Forumite
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in Pensions, annuities & retirement planning
I have checked my SP entitlement online with HMRC and it says that I have 40 years full contributions and should receive the maximum SP when it's payable in 2024. As I am currently 'entitled' to the maximum state pension I assume I shouldn't have to make any more NI contributions. So, I have a couple of (perhaps) naive questions:

1. If I continue to work for a few more years do I automatically continue to make employee NI contributions or (I know it's a long shot) some intelligence in HMRC's systems that stop the contributions? Perhaps I have to tell them to stop?
2. If I make further unnecessary contributions (over-payments?), can these be claimed back from HMRC?

Thank you.

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  • JoeCrystal
    JoeCrystal Posts: 3,013 Forumite
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    edited 24 May 2017 at 4:53PM
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    No to both questions. But you will stop paying National Insurance when you reached the State Pension Age.
    Beside, I am of firm belief that they will increase the amount of years required to get the full state pension in the long run.
  • molerat
    molerat Posts: 31,868 Forumite
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    NI is simply another tax paid whilst employed and below state pension age. It not only gives you entitlement to the state pension but other contribution based benefits. You still pay it even though you have your full quota for the state pension. It cannot be reclaimed (except in some limited circumstances that are not relevant to this thread).
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    If you work you and your employer will pay NI and you don't get to claim back contributions.

    If you stop work you can stop paying NI as you have over 35 years of contributions, if you had less you could pay voluntary NI to get a full record.

    I have 34 years of voluntary contributions and plan to make just one more and then stop.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Silvertabby
    Silvertabby Posts: 9,024 Forumite
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    Your NI contributions also benefit the NHS.
  • p00hsticks
    p00hsticks Posts: 12,835 Forumite
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    bostonerimus wrote: »
    I have 34 years of voluntary contributions and plan to make just one more and then stop.

    Before you do so I suggest that, if you haven't already done so, you get a state pension forecast, Transitional rules for the new State Pension mean it is possible to have 35 NI years or more but not be entitled to the full pension if you've been contracted out at any point.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    That's good advice, I've already checked my record online and have 31 years of voluntary contributions and 3 years for when I was in college. I've never worked in the UK and so was never contracted out. I will receive the flat rate state pension at age 67.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • aldershot
    aldershot Posts: 197 Forumite
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    Silvertabby wrote: »
    Your NI contributions also benefit the NHS.

    I would suggest that your NI contributions also benefit the Treasury which covers all government spending (including the NHS). NI is not ring fenced for any particular purpose and it's about time income tax and NI were rationalised into one tax and smoothed out. Osborne looked at doing this but backed off because the headline of basic rate tax being 32%, which it effectively is, wasn't politically palatable. Maybe the new regime will bite the bullet and just do it.
  • JezR
    JezR Posts: 1,697 Forumite
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    National Insurance is ring-fenced once it gets into the Fund. If it hadn't have been it may have been plundered in the period when it was building up surpluses in the early 2000s (which have subsequently been used to boost flagging contributions in more recent years) which some mistakenly at the time thought was going to be a permanent situation.
  • Linton
    Linton Posts: 17,173 Forumite
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    aldershot wrote: »
    I would suggest that your NI contributions also benefit the Treasury which covers all government spending (including the NHS). NI is not ring fenced for any particular purpose and it's about time income tax and NI were rationalised into one tax and smoothed out. Osborne looked at doing this but backed off because the headline of basic rate tax being 32%, which it effectively is, wasn't politically palatable. Maybe the new regime will bite the bullet and just do it.

    Indeed. This would remove the the NI upper earnings limit under which anyone in the higher or extra tax bands currently only pays a 2% marginal rate of NI and would equalise the taxes on earned and unearned income.
  • p00hsticks
    p00hsticks Posts: 12,835 Forumite
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    aldershot wrote: »
    Osborne looked at doing this but backed off because the headline of basic rate tax being 32%, which it effectively is, wasn't politically palatable. Maybe the new regime will bite the bullet and just do it.

    Don't forget that it's only effectively 32% for the working age population - once over state pension age you don't pay NI.

    Given how quickly 'strong and stable' Theresa back-pedalled over the 'dementia tax' I can't imagine the conservatives trying anything soon
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