Pensions & Retirement
State Pension and Working — Can I Claim While Still Employed?
Can you claim state pension while working? How work affects your pension, tax implications, National Insurance after pension age, and whether to defer or claim alongside earnings.
Many people continue working past state pension age. Here’s how your state pension interacts with employment income.
Read more: See our State Pension guide for a complete overview of this topic.
Can You Work and Claim State Pension?
Yes — there’s no restriction on working while claiming your state pension.
| Fact |
Detail |
| Earnings limit |
None — earn as much as you like |
| Hours limit |
None — work any hours |
| Must retire? |
No — “retirement” not required |
| Affects SP amount? |
No — your SP stays the same |
National Insurance After State Pension Age
You Stop Paying NI
| Tax |
Before SPA |
After SPA |
| Employee NI |
8-12% |
0% |
| Employer NI |
13.8% |
0% |
| Income Tax |
Normal rates |
Normal rates |
Important: You need to tell your employer or prove your age so they stop deducting NI.
Certificate of Age Exception
| Step |
Process |
| Request from employer |
Ask HR department |
| They verify age |
Using proof of DOB |
| NI stops |
From pay period after SPA |
If NI continues to be deducted, you can reclaim it.
How Tax Works on Combined Income
Example: Full-Time Work Plus State Pension
| Income Source |
Annual Amount |
| Employment |
£35,000 |
| State Pension |
£12,082 |
| Total taxable |
£47,082 |
Tax Calculation 2025-26
| Band |
Income |
Rate |
Tax |
| Personal allowance |
£12,570 |
0% |
£0 |
| Basic rate |
£34,512 |
20% |
£6,902 |
| Total tax |
|
|
£6,902 |
Note: State pension is taxed at the top of your income — so effectively at your highest rate.
Tax Scenarios: Work + State Pension
Scenario 1: Basic Rate Taxpayer
| Details |
Figures |
| Salary |
£25,000 |
| State Pension |
£12,082 |
| Total income |
£37,082 |
| Tax (after PA) |
£4,902 |
| Tax rate on SP |
20% |
State pension effectively taxed at 20% — basic rate.
Scenario 2: Pushed into Higher Rate
| Details |
Figures |
| Salary |
£45,000 |
| State Pension |
£12,082 |
| Total income |
£57,082 |
| Higher rate threshold |
£50,270 |
| Tax on SP |
Mixed 20%/40% |
Here your state pension is taxed:
- £5,270 at 20% = £1,054
- £6,812 at 40% = £2,725
- Total tax on SP: £3,779 (31% effective rate)
Scenario 3: High Earner
| Details |
Figures |
| Salary |
£90,000 |
| State Pension |
£12,082 |
| Total income |
£102,082 |
| Tax rate on SP |
40% |
| Tax on SP |
£4,833 |
All state pension taxed at 40% for higher earners.
Defer or Claim: Tax Comparison
If Near Higher Rate Threshold
| Option |
Total Income |
Tax on SP |
| Claim now (£45k salary) |
£57,082 |
£3,779 |
| Defer until retirement (£12k income) |
£24,082 |
£2,302 |
| Tax saved by deferring |
|
£1,477/year |
But you lose £12,082 pension for each year you defer.
Break-Even Calculation
| Factor |
Calculation |
| Annual pension foregone |
£12,082 |
| Annual tax saved |
£1,477 |
| Net cost of deferring |
£10,605 |
| Extra pension after 1yr deferral |
£700/year |
| Years to recover cost |
15+ years |
Deferring for tax savings alone rarely pays off — the lost income outweighs tax savings.
Working Options After State Pension Age
Continue Full-Time
| Pro |
Con |
| Maximum income |
May push into higher tax |
| Keep workplace benefits |
May not want to work full-time |
| No NI to pay |
Less leisure time |
Reduce to Part-Time
| Pro |
Con |
| More balance |
Lower earnings |
| May stay in lower tax band |
May lose benefits |
| More flexibility |
May affect pension contributions |
Common Part-Time Arrangements
| Hours |
Typical Setup |
| 3 days/week |
21-24 hours |
| 4 days/week |
28-32 hours |
| Half days |
17.5-20 hours |
| Consultancy |
Variable |
Will My Pension Increase If I Work Longer?
Working Before Claiming
| Situation |
Effect |
| Not yet at SPA |
More NI years = higher pension |
| At SPA, not yet claimed |
Deferral increases pension |
| At SPA, already claiming |
No increase from working |
Filling NI Gaps While Working
If you have gaps in your NI record:
| Status |
Can Fill Gaps? |
| Before SPA |
Working adds NI years |
| After SPA |
Can buy missing years (pay voluntary) |
| Already claiming |
Can buy missing years (pension may increase) |
Maximum NI Years
| Pension Type |
Years Needed |
Extra Years Help? |
| New State Pension |
35 |
No — capped at 35 |
| Basic State Pension |
30 |
No — capped at 30 |
If you already have 35 qualifying years, working longer doesn’t increase your pension.
Workplace Pension After SPA
Continuing Contributions
| Type |
After SPA |
| Company pension |
Can usually continue |
| Tax relief |
Still available until 75 |
| Employer contributions |
May depend on scheme rules |
Age Limits
| Age |
Pension Contributions |
| Under 75 |
Full tax relief |
| 75+ |
No tax relief on contributions |
Auto-Enrolment
| Status |
Auto-Enrolled? |
| Before SPA |
Yes (if meet criteria) |
| After SPA |
Not automatically — opt in available |
Employer Considerations
No Employer NI Savings
Employers save significant money by employing people over state pension age:
| Employee Age |
Employer NI |
| Under SPA |
13.8% on earnings over threshold |
| Over SPA |
0% |
This makes over-SPA workers attractive to employers.
Employment Rights
| Right |
Status After SPA |
| Unfair dismissal protection |
Yes |
| Redundancy pay |
Yes |
| Notice periods |
Yes |
| Holiday entitlement |
Yes |
| Minimum wage |
Yes |
Mandatory Retirement
| Rule |
Detail |
| Can employer force retirement? |
Generally no |
| Default retirement age |
Abolished in 2011 |
| Exceptions |
Objectively justified jobs only |
Self-Employment After SPA
National Insurance for Self-Employed
| NI Type |
Before SPA |
After SPA |
| Class 2 NI |
£3.45/week |
Not required |
| Class 4 NI |
9% on profits |
Not required |
| Total NI savings |
|
Significant |
Example: Self-Employed Savings
| Scenario |
NI Before SPA |
NI After SPA |
| £40,000 profit |
~£3,100 |
£0 |
NI savings of £3,100/year from being self-employed after SPA.
Practical Strategies
Strategy 1: Claim and Work
| Situation |
Best For |
| Need/want extra income |
Most people |
| Already basic rate taxpayer |
Tax-efficient |
| Want flexibility |
Can reduce work later |
Strategy 2: Defer and Work
| Situation |
Best For |
| Would be pushed into higher tax |
Higher earners |
| Don’t need SP income |
Financially secure |
| Expect to live past 83 |
Long life expectancy |
Strategy 3: Semi-Retirement
| Setup |
Benefits |
| Part-time work + State Pension |
Good balance |
| Income replaces reduced earnings |
Stability |
| Gradual transition |
Less sudden change |
Example: Semi-Retirement Income
| Source |
Annual |
| Part-time work (2 days) |
£15,000 |
| State Pension |
£12,082 |
| Workplace pension |
£8,000 |
| Total |
£35,082 |
Tax Planning Tips
Tip 1: Time Your Claim
| Tax Year Income |
Consider |
| Unusually low year |
Claim then — lower tax |
| Last year of high earnings |
Defer one more year |
Tip 2: Salary Sacrifice
If your employer offers salary sacrifice:
| Sacrifice |
Effect |
| Pension contributions |
Reduces taxable income |
| Childcare vouchers (if eligible) |
Reduces taxable income |
| Cycle scheme |
Minor reduction |
Tip 3: Marriage Allowance
| Situation |
Benefit |
| Spouse earns under £12,570 |
Transfer £1,260 allowance |
| Your tax |
Reduced by £252 |
Decision Framework
Step 1: Check Your Tax Position
| Calculate |
Amount |
| Current earnings |
|
| State Pension |
|
| Total income |
|
| Tax band |
Basic/Higher/Additional |
Step 2: Compare Options
| Option |
Tax Paid |
Total Income |
| Claim now |
|
|
| Defer 1 year |
|
|
| Defer until retire |
|
|
Step 3: Consider Other Factors
| Factor |
Weight |
| Need money now? |
|
| Life expectancy |
|
| Want certainty? |
|
| Other income available? |
|
Step 4: Make Decision
| If |
Then |
| Need income + basic rate tax |
Claim |
| Don’t need income + higher rate tax |
Consider deferring |
| Unsure |
Claim (you can always save it) |