If you are contracted out of the additional state pension scheme and living happily in the knowledge you’re paying less NI than those not paying into a pension and even those paying into a private pension … well… your life is about to change, or your pay at least.
If you are contracted out of the additional state pension scheme and living happily in the knowledge you’re paying less NI than those not paying into a pension and even those paying into a private pension … well… your life is about to change, or your pay at least.
So what’s changing?
From 06 April 2016 the rules have changed so that if you were contracted out of the state pension scheme, you will no longer be contracted out, ultimately meaning you will pay more national insurance. You will revert back to being a standard NI payer, paying what everyone else pays. Yes. It sucks.
Am I affected?
If you were on any of the following NI letters (you should be able to find this on your payslip) you WERE contracted out of the additional state pension scheme and, unless you are a C code, are impacted by the NI contribution change:
D (you D’s will be moved to over to Letter A)
E (E’s you’re heading over to B)
I (say hello to M)
C (Lucky C’s your safe, you will still pay absolutely nothing)
For all you employers out there… I’m afraid to say, you too will be taking the hit. You will no longer pay reduced NI for staff who were contracted out of the additional state pension scheme.
If you would like further information please visit the link below or if you are a Dataplan customer, feel free to contact me or any member of the team.