Changes to National Insurance contributions for some pension scheme members: updated with Q&As

Posted by rmt22 at Mar 18, 2016 10:30 AM |
Changes to State pensions, including the end of Contracting-Out and higher National Insurance contributions that could affect you. This post was updated on 24 March with Q&As from UUK.

If you are currently a member of one of the following pension schemes your National Insurance (NI) contributions will increase from April 2016:

  • Universities Superannuation Scheme (USS)
  • NHS Pension Scheme (NHSPS)
  • University of Leicester Pension and Assurance Scheme (PAS)

This arises from the Government’s decision to introduce the Single State Pension and consequently to end the State Second Pension (S2P).  As part of this change the government has removed a concession whereby the members of defined benefit pension schemes and their employers paid a lower level of National Insurance contributions. You may have seen this change referred to in the press as the ending of contracting out.

This arises from the Government’s decision to introduce the Single Tier State Pension and end the State Second Pension (S2P).  As part of this change the Government has removed the ability for members of certain pension schemes and their employers to pay a reduced level of NI contributions. You may have seen this change referred to in the press as “the ending of contracting-out”.

Existing members of the Stakeholder Pension Scheme will not be impacted by this change as the Stakeholder Scheme is not contracted-out of S2P.

Members of the PAS will be impacted by this change when they transfer to the University’s Stakeholder Pension Scheme (the ‘FriendsLife Scheme’) as the PAS is a contracted-out scheme.

Further information is available on the Payroll Section of the Finance website.

10 Q&As on USS changes

Universities UK’s Employers Pension Forum has published 10 Q&As to help active members of USS understand the changes to the Universities Superannuation Scheme (USS) from April 2016.

USS - Updated Q&As March 2016.

Further details about the changes can be found on their website www.USS.co.uk.

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