Do you pay National Insurance contributions on your pension if you retire early?

A question about : Do you pay National Insurance contributions on your pension if you retire early?

I retired at 56 on a pension of Ј8000 plus and although I pay tax, no deductions are made for National Insurance. When I do some paid work, I automatically pay NI on my earnings.

My husband is hoping to retire at the end of March 2010, aged 51 and will have a pension of Ј13,000 plus. I know he will have to pay tax but will he have to pay National Insurance too? He will not get a state pension till at least 65 and has 34 qualifying years already.

Best answers:

• He will not pay NI on the pension
  He should consider paying voluntary contributions - but with the number of qualifying years he has it may not be necessary - take advice.
• That's what we were hoping, Jem16. We were just a bit worried that it might not apply to him because he is going just before the change in early retirement rules next April.
  Thanks.
• That's fair enough, he would expect to pay NI if he works. I pay on my supply teaching salary and am happy to do so.
  Thanks again.
• [QUOTE+
  He will not need to pay NI.[/QUOTE]
  althought the qualifing years are changing he would still need to pay NI if he did any work as these are used for other benefits like JSA etc
• You're obviously aware that if he misses the end of March deadline for retiring early, he won't be able to retire till he's 55.
  I suggest that you/he carefully investigates the option of taking some of his pension as a tax-free lump sum. You need to be careful though, as although up to 25% of his total pension pot can normally be taken tax-free, the consequent reduction in the annual pension is, I believe, determined by the trustee(s) of his pension scheme, and the factors they use can vary a) between schemes, and b) over time.
  If you do go down this route, the trustee should tell you what factors they would use to calculate the figures.