Dates

kajman

Just a quick question, I am still working and I warned my employer in good time that my my official state pension date was 6th July.

Should my NI contributions have been reduced in my July pay, and then zero in my August one?

They don't seem to have changed in the July one, although they have adjusted my tax code due to my state pension income (they must have been notified by hmrc about that).

Spreadsheetman

[STRIKE]If you are still working you still pay NI.[/STRIKE]
Correction - I am wrong, not if you have reached your SP age.

molerat

Spreadsheetman wrote: »

If you are still working you still pay NI.

Not once you have reached state pension age you don't (yet !!).

https://www.gov.uk/tax-national-insurance-after-state-pension-age/stopping-paying-national-insurance

You need to speak to your payroll.

Ceme3000

Spreadsheetman wrote: »

If you are still working you still pay NI.

Are you sure? When I used to work in payroll the NI contribution category changed to letter C which was Nil rate for the employee. Employer still pays. We used to run a report of all employees reaching SPA and ensure that NI was changed after their birthday. Looking at the HMRC tables CA41 book for this tax year this would still appear to be the case.

kajman

Ceme3000 - you are right there is no NI to pay. But it now applies after SP age rather than on the employee's birthday. I was 65 in Feb, but my SP date was in July - it is getting older gradually until it reaches 70. It's so unfair for the younger workers.

My question was really if NI contributions should stop on the day itself, or at the end of the following month.

kajman

IanManc wrote: »

The oldest state pension age - for someone who was born today - is 68. Of course that might change in the future, but at present no one has a pension age later than their 68th birthday.

I thought it was going up to 70. Thanks for the correction.

molerat

kajman wrote: »

My question was really if NI contributions should stop on the day itself, or at the end of the following month.

Seems to be the unanswerable question from anything on line. nidirect.gov.uk is a bit less vague

Once you reach State Pension age you don't have to pay Class 1 or Class 2 NICs if you continue working. You only have to pay them on any earnings that were due to be paid to you before you reached State Pension age.

https://www.nidirect.gov.uk/articles/national-insurance-after-state-pension-age

LHW99

kajman wrote: »

My question was really if NI contributions should stop on the day itself, or at the end of the following month.

I run the payroll for our small business, and in the case of an employee whose SPA day was the day after the payroll for the month - NI was deducted at normal rate for that month, and was not reduced because 3 weeks of the month came after SPA. The following month it dropped to zero NI.

nigelbb

Just like income tax the day you get paid is what counts not when the salary was earned. If the salary is paid before SPA it's all subject to NI if it's paid on the day you reach SPA or afterwards then it's not subject to NI.

Not paying NI after SPA was a very welcome bonus that I only discovered a year or two prior to being eligible. It's also money straight in your salary as the extra is not subject to income tax. NI is a tax on earned income of 12% between £8632 & £50024 then 2% on remaining income. This means that effective NI & income tax rates are 32% & 42% which become 20% & 40% past SPA so there is a big tax hit if you are become a higher rate tax payer counterbalanced by the fact that you are better off by nearly £5000/year before you hit HRT.

kajman

Thanks nigelbb and others. I went back to my employer's accounts dept and they acknowledged the error, and are sending me a cheque as a refund. Result!