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.
Pension information is based on current UK legislation. Pensions are regulated by the FCA and The Pensions Regulator. This is not financial advice — consider consulting an FCA-regulated financial adviser.
Contents
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% (2% above £50,270)
0%
Employer NI
15%
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
£12,548
Total taxable
£47,548
Tax Calculation 2026/27
Band
Income
Rate
Tax
Personal allowance
£12,570
0%
£0
Basic rate
£34,978
20%
£6,996
Total tax
£6,996
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
£12,548
Total income
£37,548
Tax (after PA)
£4,996
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
£12,548
Total income
£57,548
Higher rate threshold
£50,270
Tax on SP
Mixed 20%/40%
Here your state pension is taxed:
£5,270 at 20% = £1,054
£7,278 at 40% = £2,911
Total tax on SP: £3,965 (32% effective rate)
Scenario 3: High Earner
Details
Figures
Salary
£90,000
State Pension
£12,548
Total income
£102,548
Tax rate on SP
40%
Tax on SP
£5,019
All state pension taxed at 40% for higher earners (this simplified example ignores the separate personal allowance taper that applies between £100,000 and £125,140).
Defer or Claim: Tax Comparison
If Near Higher Rate Threshold
Option
Total Income
Tax
Claim now (£45k salary)
£57,548
£3,965
Defer one year, work only (~£25k income)
£25,010
£2,488
Tax saved by deferring
£1,477/year
But you lose £12,548 pension for each year you defer.
Break-Even Calculation
Factor
Calculation
Annual pension foregone
£12,548
Annual tax saved
£1,477
Net cost of deferring
£11,071
Extra pension after 1yr deferral (5.8%)
£728/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
15% 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 (voluntary, since April 2024)
£3.65/week if paid voluntarily
Not required
Class 4 NI
6% on profits £12,570–£50,270, 2% above
Not required
Total NI savings
Significant
Example: Self-Employed Savings
Scenario
NI Before SPA
NI After SPA
£40,000 profit
~£1,646
£0
NI savings of roughly £1,646/year from being self-employed after SPA. This is Class 4 NI only: (£40,000 − £12,570) × 6% = £1,645.80. Class 2 NI is voluntary for everyone since April 2024, so it isn’t a compulsory saving — but if you had been paying it voluntarily (£3.65/week, £189.80/year) to protect your NI record, you’d also stop needing to after SPA since your qualifying years are already fixed by then.