STATE PENSION AGE CHANGES FROM APRIL 2026

ASESA Solutions Ltd - KEY CHANGES TO STATUTORY SICK PAY FROM APRIL 2026

From 6 April 2026, the State Pension age has started gradually increasing from 66 to 67. This change is being introduced over a two-year period and affects individuals born between 6 April 1960 and 5 March 1961.

As a result, employees will now reach State Pension age at different times depending on their date of birth, creating important payroll and National Insurance (NI) considerations for employers.

National Insurance Changes for Employees Reaching State Pension Age

Once an employee reaches State Pension age:

• Employee National Insurance (NI) contributions will stop

• Employer NI contributions will continue to apply

• Payroll records and NI categories must be updated accurately

Although the financial impact may be relatively small, employers should ensure payroll systems reflect these changes correctly to avoid reporting issues.

Payroll & Compliance Considerations

As this is a phased change rather than a single implementation date, employers may see different employees affected at different times across the workforce.

Key areas employers should review include:

• Correct NI category allocation

• Accurate payroll processing and RTI submissions

• Employee date-of-birth records

• Ongoing payroll compliance checks

It is also important to note that reaching State Pension age does not automatically mean an employee will retire. Many individuals continue working beyond pension age, meaning these payroll changes may apply within existing teams.

Example

If an employee reaches State Pension age while remaining in employment:

• Employee NI deductions will stop from the relevant pay period

• Employer NI contributions will still apply

• Payroll systems should be updated to reflect the correct NI category

Failure to apply the correct NI treatment could result in payroll inaccuracies or HMRC reporting issues.

Conclusion

These changes highlight the importance of maintaining accurate employee records and ensuring payroll systems remain aligned with current HMRC requirements.

Regular payroll reviews and early preparation can help employers manage these changes smoothly while maintaining ongoing compliance.