Do I Pay National Insurance On My Pension Contributions?

Do you get National Insurance relief on pension contributions just as you get tax relief?

Question asked by Ms A Li
Are You Pension Happy?
Call us on 02084327334
I know how much my pension is worth
I know how much my pension costs
I have clear financial goals for my retirement

Answered by Michael Englefield

Is NI payable on pension contributions?

Yes, you do have to pay National Insurance contributions on money going into your pension.

You rightly state that you don’t pay income tax on pension contributions, but National Insurance is still due on cash you put into your pension.

If you’re employed, your employer will deduct National Insurance contributions from your wages before you get paid, so before any tax or pension contributions have been deducted.

calculating-national-insurance-on-pension-contributions

Your payslip will show the National Insurance contributions you’ve made over the year. If you earn above the £8,060 National Insurance threshold for the 2016/17 tax year, you pay 12% of your earnings. This rate drops to 2% on anything you earn above £43,000.

If you’re self-employed you pay Class 2 contributions of £2.80 a week for 2016/17 on all earnings above £5,965, plus Class 4 contributions of 9% of taxable profits between £8,060 and £43,00. On profits over £43,000, Class 4 contributions are 2% of profits. Again, these contributions are made from your profits before tax is deducted and any pension contributions have been made.

Pension
 
National Insurance contributions
 
Pensions and tax
 
Income tax
 
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
Start your journey today...
  Find out how a Drewberry financial adviser can help you reach your destination by making the most of your finances.
Call us on 

Frequently Asked Pensions Advice Questions

 
I have an old pension with a former employer – should I consider transferring it to my...
 
I have started drawing my pension but with the new pension freedom rules I can see me wanting to top...
 
I know I had a pension with my first employer, but I don’t know who it was with or where any of...
 
I like the idea of an annuity providing a stable income during retirement, but I never got around to...
Need Help? Live chat now and get an instant answer from our Experts...

Neil
Pensions

Victoria
Insurance
Our Latest Reviews
Jacqueline Ainsworth
06/11/2018

Communicative and trustworthy. My thanks to Jake Mills for being a consummate professional.

Ryan Springett
30/10/2018

The process to securing insurance was seamless and everyone involved from Drewberry along the way was very professional. Price options they presented were also competitive compared to my own research. Would definitely recommend them.

Roy Collins
07/11/2018

Very helpful and explained well the whole process of getting this insurance. Thank you.

We are rated 4.9/5 based on 1742 independent client reviews.
To read more of our independent client reviews click here →
REVIEWS
EXCELLENT
4.92 / 5 Average
1864 Reviews
R Collins
Overall Rating
Very Helpful and explained well the whole process of getting this insurance thankyou
J Ainsworth
Overall Rating
Communicative and trustworthy. My thanks to Jake Mills for being a consummate professional.
M Dixon
Overall Rating
Very helpful and professional and looked at a variety of suitable options.
B McCallum
Overall Rating
Jake help me a lot setting up my life insurance and illness protection policy
H Coad
Overall Rating
Egle was very knowledgable of the products and went above and beyond to find the right policy for me