State Pension age is going up from 66 to 67 years. The change impacts both men and women, and is being phased in over two years, starting from 6 April 2026.
This means that anyone born between 6 April 1960 and 5 March 1961 will reach their individual State Pension age at 66 years – and a specified number of months. A State Pension age calculator tool on GOV.UK can be used to find individual dates.
Employer actions needed
Update payroll: Employees are no longer liable to pay National Insurance when they get to State Pension age, though employers still need to make secondary Class 1 contributions. Employers therefore need to check for staff in this age bracket, and update payroll records accordingly when someone reaches State Pension age.
This involves changing the National Insurance category letter to ‘C’ in payroll software to stop deductions. The change is needed for the first payment date after State Pension age is reached. Year-to-date information should still be reported under the old category letter until the end of the tax year.
Think paperwork: Employers need proof showing that someone has reached State Pension age. This should be the birth certificate, or passport. A certificate of age exception (CA4140) is also acceptable. These are no longer being issued, but some employees may already have one.
Communicate: Employees who start to claim their State Pension, rather than deferring it, are likely to receive a new tax code. That’s because though State Pension is taxable, tax is not currently deducted at source, and the coding needs adjustment to reflect the new source of income.
It may be worth providing employees with relevant explanations at the outset, to manage expectations and pre-empt queries.
