Do not include any payment by way of a pension in gross pay for
Class 1 NICs purposes. This applies to a pension payable in
connection with long service, retirement or ill-health and any
pension which is commuted to a lump sum.
These payments are excluded from liability for Class 1 NICs under the above provisions.
For details of the Class 1 NICs position on payments made out of a retirement benefits scheme on or after 6th April 2006, see NIM02700 (contents).