Does state pension reduce if you stop paying NICs?

2 January 2019


In reply to a recent letter regarding pensions (AH/Kent October 2018 edition) it was stated that your state pension will reduce if you stop paying national insurance contributions (NICs) due to early retirement, even though you have paid NI for more years than required to qualify for a full state pension. Michelle Cracknell’s reply does not contradict that statement.

Does your state pension reduce if you stop paying NICs due to early retirement?

For example, a person decides to take early retirement at 60 and to live off savings and personal pensions. They have paid NICs from the age of 18 to 60 (42 years), entitling them to a full state pension. Now they are no longer working they stop paying NICs. Will they still get a full UK state pension despite not paying NI for the final six years prior to reaching state pension age? They would, after all, have paid NI for more than the required 40 years.



No, your pension will not reduce. If you are reaching state pension age after April 2016, you will receive the full amount if you have contributed or received credits for national insurance for 35 years.

The exception is if you have been contracted out through a workplace pension scheme during your career. In this case, there will be a contracted-out deduction applied to the state pension.