Pensionable age, the tax treatment of private pension savings, and state pension provision are all in a state of flux. For the time being, however, all earners must pay National Insurance contributions (NICs), which are effectively another tax. Employers not only pay employer contributions for each employee, but also collect and forward their employees’ contributions. Paying contributions entitles an individual to a state pension. But most people will need to make additional private provisions. (See Personal pension schemes, Stakeholder pensions, Company pension schemes, and Executive pensions.) This briefing explains:
- Who pays what.
- An employer’s responsibilities.
- How to reduce the NICs you pay.
- How NICs affect an individual’s entitlements.
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