NI payments for the partly retired

agent69

I am retiring at the end of the month aged 62, but may get involved in some agency work if I get bored.


I will be taking circa £16k a year from a DC pension pot and toping it up with personal savings until my DB pension kicks in at 65 (and state pension at 66). I know that you normally pay NI at 12% on earnings between £162 and £892 a week, but am unclear on the effect of the pension income?.



I appreciate that I will pay income tax on all my agency earnings, as my personal allowance will have been used up on the DC payments. I do not pay NI on my pension income, but will I pay NI on all my agency earnings, or only the bit above £162 / week?

Dazed_and_confused

No NI on pension income.

NI as normal on wages. Pension does not affect that.

As you say you will have no spare Personal Allowance so will need to be on either BR, SBR or possibly SD0 tax code at the job depending on where you are resident for tax purposes and how much you are earning at the job.

As you mention personal savings you should also remember you would have around £1,500 of the savings starter rate of tax (0%) available plus the £1,000 savings nil rate (also 0%) but once you earn £1,500 taxable wages that will mean you lose the savings starter rate band and will just have the savings nil rate of upto £1,000.

Dazed_and_confused

And have you checked your State Pension entitlement on gov.uk yet?

That is a useful thing to do, particularly as you are under the transitional rules where the 35 years rules doesn't apply. Might be a nice surprise or an unexpected position but better to be informed now than a few weeks before your State Pension comes into payment.

Might also influence your decision about the attractiveness of the agency job.

xylophone

Check state pension position.

https://www.gov.uk/check-state-pension

agent69

Dazed_and_confused wrote: »

NI as normal on wages.

So by normal you mean first £162 / week of agency earnings will not attract NI?

Dazed_and_confused

Possibly for a week or two.

But the Primary Threshold is £166/week in 2019:20.