What age do you stop paying national insurance? Do UK pensioners pay tax contributions as payments set to rise

National insurance contributions are made to qualify for certain benefits from the UK government, including the state pension

Boris Johnson is considering a rise in national insurance payments to fund social care.

According to reports, the prime minister is set to announce an increase in the financial contributions millions of UK people make each month.

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There are varying increases being spoken about from 1-2% in national insurance contributions, with different government figures and departments having their say.

It comes despite the Conservatives promising ahead of the 2019 general election not to increase national insurance, income tax or VAT in their manifesto.

Here’s a look at who pays national insurance, when it starts and stops and how much the proposed rise could be for UK contributors.

Who pays national insurance?

National insurance contributions are made to qualify for certain benefits from the UK government, including the state pension.

Payments are made by people who are 16 years of age or over and are either an employee earning more than £184 a week or self employed making a £6,515 profit or more a year.

There are different types of national insurance classes, which is linked to how much you pay depending on employment status and how much you earn.

There is the option to pay voluntary contributions to avoid gaps in national insurance record while anyone earning between £120 and £184 a week has their record protected.

How are national insurance contributions calculated?

National insurance is made up of contributions deducted from their pay and those paid by their employer and depends on national insurance category and earnings.

National insurance categories:

  • A - All employees apart from those in groups B, C, J, H, M and Z in this table
  • B - Married women and widows entitled to pay reduced National Insurance
  • C - Employees over the State Pension age
  • J - Employees who can defer National Insurance because they’re already paying it in another job
  • H - Apprentice under 25
  • M - Employees under 21
  • Z - Employees under 21 who can defer National Insurance because they’re already paying it in another job

Current employee national insurance rates:

  • Category letter - £120 to £184 (£520 to £797 a month) - £184.01 to £967 (£797.01 to £4,189 a month) - Over £967 a week (£4,189 a month)
  • A - 0% - 12% - 2%
  • B - 0% - 5.85% - 2%
  • C - N/A - N/A - N/A
  • H - 0% - 12% - 2%
  • J - 0% - 2% - 2%
  • M - 0% - 12% - 2%
  • Z - 0% - 2% - 2%

A category A employee will pay nothing for the first £184 earned, 12% on earnings between £184.01 and £967 and 2% on earnings over £967.

When do you stop paying national insurance?

National insurance contributions stop when you reach state pension age.

The state pension age changes over time, impacting different generations with life expectancy increasing, generally, and people working later in life.

For people reaching state pension age now (September 2021) then you will stop making national insurance contributions from the age of 66 for men and women.

For those born after 5 April 1960 the state pension age increases further to 67 and then again to 68 for those born after 5 April 1977.

How much is the proposed national insurance rise?

There are varying reports on how much the rise in National Insurance contributions could be.

Health secretary Sajid Javid is pushing for a 2% rise though chancellor Rishi Sunak is trying to keep any increase under 1%, according to The Times.

Number 10, however, wants a one percentage point rise, while the Treasury is pushing to go even higher to 1.25 percentage points, reports the Daily Telegraph.

No decisions have yet been made, was the government’s message on Friday 3 September.

Justice secretary Robert Buckland said it had to be a "generational change", as well as one for parliament, in an interview with Sky News.

He said: "We will work as quickly as possible in order to get that certainty that I think so many people have been looking for for so long."