More than six million workers to be stripped of take-home pay under stealth tax raid

[dutchman]

The new system, introduced next month, will see millions of workers face paying more tax through increased national insurance contributions



More than six million workers will be stripped of some of their take-home pay from next month under a stealth tax raid by George Osborne to help balance the books, experts have warned.

The new system, which will see millions of workers face paying more tax through increased national insurance contributions, is expected to net the Treasury £5.5 billion a year.

Experts say that under the new scheme, which was announced three years ago, those in the middle of their working lives are likely to lose out the most.

Those affected are expected to include around 1.4 million private sector staff who are enrolled in final salary schemes and are likely to be long-term employees of large companies.

Under the current system the majority of workers in final salary schemes choose to opt out of the earnings-related State Second Pensions and instead pay money into their occupational pension.

These workers pay a lower rate of national insurance to reflect the fact that they do not get the second state pension.

However, the new single-tier pension that will be introduced in April will remove this option and will result in many more workers and employers paying more national insurance.

The increase in taxes is expected to cost private sector employers £1.2 billion this year and experts warn this could lead to employers being forced to scrap pension schemes.

In the public sector, employers are being warned they will have to look to make cuts as a result of the £2.7 billion-a-year cost of the tax increase.

Steve Webb, the former pensions minister now director of policy at Royal London, told The Times: “I think the chancellor had hoped that no one would notice this rather large tax increase smuggled out in advance as it was some years ago.”

[rebbonk]

Some say, "Good old George." - Others tell the truth!