Treasury: contracting-out ban not motivated by £5bn windfall

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Bringing forward the end of pension scheme contracting-out by 12 months was not motivated by the expected £5.5bn bump to government coffers, economic secretary to the Treasury Sajid Javid has said.

During his 2013 Budget, Chancellor George Osborne confirmed that the government will bring forward the implementation of the single-tier state pension from 2017 to 2016, which will also herald the end of contracting-out a year earlier than defined benefit (DB) schemes had planned for. Schemes will lose their National Insurance rebates for contracted-out workers, meaning they will pay about £650 extra per worker each year, while the Exchequer will receive an extra £5.5bn, according to Hargreaves Lansdown head of pensions research Tom McPhail. However, at the National Association of Pen...

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