Ni Contributions

[Bazile]

I understand that the Chancellor brought in some changes in the last budget , which had an effect on how much NI you paid , with respect to company pensions .

Something about pensions contracted out - employees now having to pay increase NI ?

What was the change ?

[queen 1954]

http://www.which.co.uk/news/2016/03/national-insurance-increase-for-6-million-in-april--437628/

[fiction-factory]

Yes, it just affected those in defined benefit (final/career average salary) schemes- about 1 million private sector workers and 5 million public sector workers.
They now pay the full 12% NI rather than the contracted out rate of 10.6% on earnings between around £8000 and £43000 pa.
It's all linked to the introduction of the new flat rate pension. (There will be many people in such pension schemes who will be surprised that their lower rate contributions in previous years may mean their new state pension based on current service could be around £120 pw rather than the new flat rate of around £155)

[Bazile]

So , the fact that you are in a final salary scheme meant that it would have automatically been contracted out and by default you would have 'opted ' out of the state second pension , thus paying 10.6% on your earnings ?

[fiction-factory]

Yes, I think that's right. i have to get ready for work now but the article in queen's link explains it better than I could

[Bazile]

Thank You both