National insurance exemption – how it applies to farmers over 66
© Tim Scrivener Employees who continue working after they reach the state pension age of 66 do not have to pay national insurance (NI) contributions.
Almost 900,000 working pensioners benefited from this exemption in 2025-26, says Sean McCann, a chartered financial planner with NFU Mutual, with the amount of NI relief given to pensioners rising by 43% to £1.2bn in the past five years.
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In 2025, two-fifths of all farm holders in England were over the age of 65 and across the general population, the proportion of 65-69-year-olds working has almost doubled in the past 20 years from 15.8% in 2006 to 29.7% in 2026.
The proportion of people aged 70-74 who are still working more than doubled between 2006, when it was 5.6%, to 11.9% in 2026, according to the Department of Work and Pensions.
Employees
Employees usually pay Class 1 NI contributions. Employers should stop deducting these once the employee reaches state pension age, and it is suggested that a proof of age is shown to employers in order to confirm this.
Employer Class 1 NI contributions must still be paid beyond state pension age.
Self-employed
Self-employed NI is more complex and those approaching or reaching pension age should check their position and contributions record, say advisers.
Class 4 NIC payments should stop from the start of the tax year (6 April) following the tax year in which a person reaches state pension age. The state pension age rises to 67 in April 2028.
Consider voluntary contributions
Those who do not have a full NI contribution record will not be entitled to a full state pension but can often make top-up voluntary contributions covering the previous six tax years.
The full state pension rate will rise by 3.9% from April 2027, to £250.70 a week, or £13,036.40 a year.
Employer NIC relief for staff who are armed forces veterans
Employers pay no national insurance (NI) contributions for the first year on the earnings of someone who is an armed forces veteran.
This relief was introduced in April 2021 to help ease veterans into the civilian workplace, with a new NI code of V introduced to cover the measure, which applies to earnings below £50,270 a year or £4,189.17 a month.
The relief applies to any employer hiring a veteran in the first 12 months of their civilian employment and can be claimed against anyone who has served at least one day in the armed services, explains Steven Denton of accountant Whitings.
If a veteran has several employers in their first 12 months of civilian work, each of those employers can claim the relief.
The 2025 budget extended the scheme to April 2028. HMRC expects evidence to be available that the conditions of the relief are met.
