Changes to National Insurance Contributions for Pension Members

Abolition of Contracting Out

A new Flat Rate State Pension is being introduced for people who reach State Pension Age on or after 6 April 2016.

As a member of one of our occupational pension schemes ie Local Government Pension Scheme (LGPS), Teachers’ Pension Scheme (TPS) or Universities Superannuation Scheme (USS), you are currently contracted out of the Additional State Pension and therefore you receive a rebate on your National Insurance Contributions (NICs).  This means that most members are currently paying a lower amount of NICs.  From April 2016, however, you will no longer receive this National Insurance rebate which means you will start to pay a higher amount of NICs.

As a member of either LGPS, TPS or USS, you may not receive the full amount of State Pension.  This is because you have paid a lower amount of NI in previous years.  You will of course continue to be entitled to your LGPS, TPS or USS benefits which provide an excellent range of benefits for you and also your dependants.

More information about the new State Pension is available at www.gov.uk/yourstatepension

If you are over age 55 you can request an estimate of the State Pension you will receive under the new system at www.gov.uk/state-pension-statement

For HMRC NI Calculator go to https://nicecalculator.hmrc.gov.uk/Class1NICs1.aspx

If you have any queries please contact Natasha Halsall, Pensions Manager at nhalsall@lincoln.ac.uk