Ask the Expert: Does my employer still have to contribute to my pension when I've reached retirement age?
This week, our reader wants to know whether their employer still needs to contribute to their pension if they’ve reached retirement age, and when they should start taking their pension.
Carl Lamb of Almary Green responds.
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I’m a bit like the person in last week’s question: I am about to start taking my state pension and am still working part-time earning about £500 a month before tax.
My employer is a one-man band and I do all the paperwork including the payroll records.
Can you confirm please that I should just stop taking the National Insurance from my pay?
Does my employer still have to pay into my work pension now I’ve reached retirement age? I don’t plan to start taking it yet.
Almary Green response:
There are two halves to this question, so let’s deal with them separately.
Firstly, you will indeed stop paying National Insurance when you reach your state retirement age. However, your employer must still pay Employer’s NI contributions for you while you are still working.
As you are the person in charge of the payroll at your workplace, you must make the changes to the PAYE records: you can find out how to do this on the Government website at https://www.gov.uk/employee-reaches-state-pension-age.
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As for your workplace pension, if you earn more than £6,136 in the 2019/20 tax year (£6,032 in the 2018/19 tax year which has just finished) then you have the right to opt to continue to contribute to your workplace scheme and your employer must put in the appropriate corresponding employer’s contribution.
These rules apply until you reach age 75, provided you earn more than the “lower earnings threshold” that apply for the tax year in question.
However, if you earn less than the threshold, you have the right to be in the scheme and make contributions but your employer is not required to contribute to your fund.