Millions of Britons who have reached State Pension age can continue working while receiving their pension, according to fresh guidance issued by HM Revenue and Customs (HMRC). The department said the rules surrounding tax and National Insurance are “pretty straightforward” for those combining work with retirement income.
The update comes as the State Pension age continues to rise gradually in the UK. People born on or before 5 April 1960 currently qualify for the State Pension at 66, while those born later may need to wait until 67 depending on their date of birth.
HMRC shared the advice through its Tax Confident campaign and social media channels, where it answered common questions about employment, pensions and tax liabilities after retirement age. The guidance applies to people receiving the State Pension, workplace pensions, private pensions, or a combination of these while remaining in paid work.
The department also stressed that although National Insurance contributions stop once a person reaches State Pension age, Income Tax rules still apply to total annual earnings from all sources.
National Insurance Payments Stop After State Pension Age
According to HMRC, employees no longer pay National Insurance contributions once they reach State Pension age, even if they continue working. Employers automatically stop deducting contributions after verifying the worker’s age through documents such as a passport, birth certificate or State Pension award letter.
HMRC also noted that workers can request an official letter confirming they have reached State Pension age if needed by their employer. The guidance forms part of the government’s wider effort to explain retirement tax rules more clearly to older workers.
For self-employed people, the process works differently. According to GOV.UK, National Insurance contributions stop from the beginning of the tax year following the date a person reaches State Pension age. HMRC advised self-employed workers to include their date of birth on tax returns so records can be updated correctly.
The government also reminded pensioners that the State Pension age itself is changing. Between April 2026 and March 2028, the qualifying age will gradually rise from 66 to 67. Many people continue working after retirement age for financial or personal reasons, and HMRC said the system is designed to accommodate this without major complications.
Pension Income Can Still Be Taxed Alongside Earnings
Although National Insurance payments stop, pensioners may still have to pay Income Tax depending on their total yearly income. According to HMRC, taxable income can include wages, self-employment earnings, the State Pension, workplace or private pensions, savings interest, investments and rental income.
The current standard Personal Allowance remains £12,570 a year. Individuals whose combined income stays below that threshold do not pay Income Tax. Once income exceeds the allowance, tax applies only to the amount above it.
HMRC explained that the State Pension is paid without tax being deducted directly. Instead, it is added to a person’s other income to determine whether tax is owed overall. In many cases, tax is collected through the Pay As You Earn (PAYE) system by adjusting a worker’s tax code.
According to the guidance published on GOV.UK, people receiving both employment income and workplace pensions may see HMRC alter their tax code so the correct amount is collected automatically. The department also encouraged pensioners who are still employed to monitor their payslips regularly. HMRC said workers who believe they may have paid too much tax or National Insurance can check their records online or through the HMRC app.
