Abolition of SERPS
Posted on 14 Jun 2023
Abolition of Serps brings rise in NI payments for millions
Changes to NI payments coming into effect next month will see over 6m workers take home less pay. The abolition of the second state pension (Serps), announced three years ago, will mean employers and employees who opted out of Serps will have to pay higher NI rates. From now on people will just receive the single-tier pension. Workers face an extra 1.4% of NI on earnings, but employers will be hit by a rise of about 3.4%. Workers who are paying into final salary retirement schemes are expected to be hit by demands from their employers for higher pension contributions in addition to the tax hike. It is estimated that 1.5m in the private sector and 5m in the public sector will be affected by the move, which will net the Treasury £5.5bn a year.
Source: The Times (28/03/2016)
