Jan 14

Single-Tier Pension White Paper

Increasing longevity means we need better pension provision if we are not to see increased pensioner poverty. Simplifying the system to remove disincentives to save, on the face of it, seems sensible. However, increasing National Insurance Contributions (NICs) for employers with good occupational pensions actually puts those pensions at risk. Private sector employers will cut back their schemes to compensate. The Government may want to make further cuts in public sector pensions.

The abolition of contracting-out will increase NICs for teachers at a time when teachers’ pay will have been frozen or under severe restraint for many years. Teaching is a great profession, but an increase in NICs will cut take home pay yet again and cause teachers to either opt out of their pension scheme or seek to leave teaching altogether. Teachers urgently need a pay rise to counter the rising cost of living, higher pension contributions and the threat of higher NICs.