State pension age Britons urged to ‘prepare’ to pay National Insurance changes | Personal Finance | Finance

Traditionally, at state pension age, a person will no longer have to pay National Insurance. This is regardless of whether they continue to work or choose to retire. 

However, there is a major change which is set to come into force this April, one which will be further emphasised in April 2023.

HM Revenue and Customs (HMRC) has now issued vital guidance, urging Britons to “prepare” for a new levy.

It explained: “Your National Insurance contributions might increase when the Health and Social Care Levy comes into effect in the UK (England, Scotland, Wales and Northern Ireland) on April 6, 2022.

“The increase in your contributions will be used to help fund the NHS, health and social care.”

READ MORE: State pension for married women set to increase this year

George Dibb, head of policy research at the Institute for Public Policy Research, recently said: “Raising National Insurance contributions to pay for this is better than doing nothing at all. However, it is not the best way to fund this policy.

“Even with the levy extended to working pensioners and dividend income, older working people will be paying far less in contributions and many of those relying on income from wealth will be paying nothing additional on that income at all.”

The Prime Minister Boris Johnson and Chancellor Rishi Sunak recently said the NI rise “must go ahead” in order to fund Covid recovery.

In a co-authored article in The Sunday Times, the pair said: “We are Thatcherites, in the sense that we believe in sound money. There is no magic money tree.

“The only reason we were able to protect families and businesses during Covid was that we had been responsible with the public finances. We will take the same responsible approach to our recovery plan, from tackling the cost of living to fixing the backlogs.”