Workers keep paying NI despite qualifying for state pension

Pensions minister Steve Webb has revealed more than six million people continued to pay National Insurance contributions (NICs) in 2008-09 despite having already qualified for a full state pension.

Webb, pictured, revealed the figures in written answers to questions from Gordon Banks, Labour MP for Ochil and South Perthshire.

The statistics show the number of people who had already paid enough NICs to receive a full state pension in 2010-11 was 430,000, compared to 70,000 in 2009-10.

Previously, workers had to pay 44 years' worth of pension contributions, but in 2010 this was reduced to 30 years.

NICs pay for state pensions as well as unemployment, illness and disability benefits. The NHS is also partially funded by NICs.

NI cannot be accessed directly by the government for general spending, but some parts of the NI fund are invested in government securities, effectively allowing the government to borrow it for capital projects such as building schools and hospitals.

Chancellor George Osborne said in the Budget the government will investigate reforming the income tax and NI system, with the possibility of merging the two payments in the future.