Those opposed to the introduction of additional compulsory pension contributions in the UK are likely to seize on news Japan is going to force workers and employers to increase contributions to the state pension system, which business groups there say could cut company earnings in half and stall the country's efforts to get out of a decade-long economic slump.
The Japanese government is expected to use its next Budget to call for an increase in contributions from the current level of 13.58% of salaries to 18.35%. Business leaders say raising contribution levels to 18% would cut corporate profits in half, based on this year's figures. The government seems to have little choice, however, given forecasts that more than a third of the population will be 65 or older by 2025, and pledges not to increase sales tax – roughly equivalent to VAT in the UK – for the next three years. Sales tax accounts for a large portion of the funding of state pensio...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
