As changes to National Insurance come into force this month affect millions of working-age Britons, pensioners who are generally exempt from paying National Insurance will have to pay a health and social care tax next year, when the tax hike is separated from national insurance. However, there are ways for retirees to avoid paying tax altogether or at least offset the additional financial burden.
National Insurance’s controversial 1.25% hike continues this month, despite people struggling to cope with the cost of living.
Not everyone will be out of pocket, but National Insurance will rise to 13.25% for people earning between £184 and £967 a week.
From April 6, 2023, the 1.25 percentage point hike will be split into a health and welfare tax.
This will include pensioners who are still working after reaching statutory retirement age – which is currently 66 – if they earn more than the main national insurance threshold.
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He added: ‘It may be worth doing, especially as National Insurance rates rise by 1.25 per cent.’
While this option may not work for everyone, retirees can also ensure that they receive all the government assistance to which they are entitled.
Pensioners will not have to pay National Insurance if they earn less than £184 a year and could also be eligible for pension credit.
This could make a huge difference for people on low incomes, as it could also mean they qualify for a council tax cut, help with energy bills and a free TV license.
After doing a benefit check, people can also look for ways to earn more money to offset the rising cost of living.
Express.co.uk recently spoke to retirees to find out some of their top money-making tips.
These ranged from changing banks to accepting additional flexible working, earning some pensioners up to £290 a day.
It is also possible to take in a tenant and earn £7,500 a year tax free.