Rachel Reeves to Spare Public Sector Gold-Plated Pensions From £15bn Tax Raid
Public sector gold-plated pensions will be shielded from Rachel Reeves’s plans to mount a tax raid on employers’ pension contributions, while those in the private sector face lower wages and less money in retirement. The Times has the story.
The Chancellor is expected to use her budget on October 30th to announce plans to impose national insurance on employers’ pension contributions as she seeks to balance the books. The measure is expected to raise £15.4 billion.
However, the Treasury will reimburse public sector employers, including the NHS and Government departments, because otherwise they would have to make significant cuts to their budgets, the Times has been told.
It would cost the Government an estimated £5 billion, which means that the rise will fall entirely on businesses and, ultimately, private-sector workers. Experts said that employees would have less generous pensions and companies could also absorb costs by reducing future pay rises.
Worth reading in full.
According to the Telegraph, experts have criticised the “outrageous” move, which will only deepen the gulf between private sector pensions and the much more generous public sector schemes.
Last week it was revealed that the Chancellor will have to find more than £900m for the U.K.’s ever-ballooning public sector gold-plated pensions bill.
Public sector workers still receive salary-linked pensions that increase in line with inflation every year, while these retirement deals were found to be unaffordable in the private sector long ago. Instead, private sector workers are now only guaranteed pension contributions from their employer worth 3% of their salary.
Former pensions minister Baroness Ros Altmann said: “If the public sector cannot cope with imposing National Insurance contributions on pensions then that is a clear indication that all employers would also struggle and this change should not be imposed at all.”
Employers pay National Insurance (NI) of up to 13.8% on employee earnings, but salary paid into a pension is tax-free.
Applying the full 13.8% rate to employer pension contributions would raise around £17bn a year for the Treasury, according to the Institute for Fiscal Studies.
Although the cost of the policy falls on employers rather than their employees, experts have previously warned workers would indirectly suffer as companies cut back on generous pension schemes.
“Starmer is sacrificing us all to protect the pampered public sector,” says Sam Brodbeck. “The unions are flexing their muscles and have Labour over a barrel. Expect more bungs to come.”
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Shoring up the Labour vote
Which mirrors the vote on-shoring they’ve been at for decades.
The voting numbers suggest otherwise but they won a big majority anyway.
Labour are dedicated to waging a class war. They have always been against the wealthy and more recently don’t care about the ‘working class’. The are waging war on behalf of the Civil and Public Servants, teachers, NHS staff, Quangos, and anybody else in the bureaucracy.
And with all wars you expect casualties and collateral damage which is why Labour don’t seem to assess the impact of their proposals very deeply.
The intention to stoke societal anger and discord is palpable.
The private business sector is the only part of our economy creating wealth. Our public services get worse year by year and yet are ever more richly funded. The only conclusion and it is a comment I keep repeating is that Kneel and his criminals are hell bent on bankrupting the country either to sell the country to the big money houses or to force us back into the EU prison. This has to be deliberate. While I most definitely do subscribe to the view that we have the thickest politicians in my lifetime I do not accept that at least some of them must know that what they are doing is national suicide.
As usual the Davos Deviant agenda is being kept from us but that is the one Kneel is implementing.
Traitors all.
Speaking of stoking anger and discord, Labour councilor Ricky Jones got bail. I don’t think many of the others got bail, did they? They’ll all be in prison for Christmas;
”Just spoken with @metpoliceuk
Labour thug Ricky Jones has been RELEASED on bail ahead of his trial in January.
He’ll enjoy Christmas with his family, while Peter Lynch was fast-tracked through the courts & effectively killed by Starmer’s political persecution.”
https://x.com/Suffragent_/status/1849002067651604988
Peter Lynch knew the score. Corruption root to branch. Now he’s dead due to the very corruption he tried to warn others about. Has his name even been mentioned in Parliament yet? Has his premature death been acknowledged by those responsible for putting him in jail?
”The country was told Peter Lynch was a violent right wing extremist thug. Watch this video. Listen to what he says and how he says it and you will see that he was in fact just a softly spoken grandfather with concerns about the governance and future of his country that are shared by millions. He was put in prison and now he is dead. Shame on the state and the media that is supposed to protect people from tyranny, not facilitate it. RIP Peter.”
https://x.com/ABridgen/status/1849021289379271164
No reason at all to put Peter Lynch in prison. He was no threat to society.
A perfect example of Labour’s two tier justice system.
If Ricky Jones serves time I will be amazed. Got to stoke the tensions.
How does it go?
‘Every little helps.’
Currently employers are obliged to pay a minimum of 3% of an employee’s earnings into a pension scheme. However, many pay in more, often with matching schemes; if the employee pays in more the company pays in more.
To mitigate NI on employer contributions the employer will simply reduce employer enhancements, thus reducing eventual pension pots. Another raw deal for the wealth generating part of the economy.
How any of this is supposed to result in growth remains a mystery.
When Labour refer to growth, it’s always about increasing the size and power of the State.
I guess it is the result of mistaking the tea lady at the Bank of England for an intelligent economist fit to be chancellor.
If they are going to tax pension investments via NI, would it have an effect on Additional Voluntary Contributions (AVC)? Years ago, when I was at work, I used to use that method when it was tax efficient, being close to the edge of higher rate tax. When I started drawing an income from the scheme, it resulted in a minimum lump sum to balance the AVC investment.
Nasty Head Girl. Things could flip quickly for her.
I always thought Mrs Balls was the Head Girl – albeit looking increasingly weary/miserable these days with Reeves and Phillipson having been made prefects because they sucked up to the Head and then actually believed that they were up to the job, hence the ever present arrogant smirking, sense of superiority and entitlement.
Pixie Balls Cooper is ageing badly which is perhaps punishment for lying about taking in Syrian refugees.
I wouldn’t lose heart I think we have reached a turning point the bttom of the kali yuga. And the Austrailian aboriginies prophesied that there would be a parting of the ways where one group ascends to a higher realm and the others will be confined and condemned to a boring planet but they wojn’t even notice anyway. They said it would start with a run on toilet paper and then shortly afterwards in toilet paper became the hottest commodity in town and of course it was all the saps who were buying it up. They couldn’t bear to improvise the wiping of their arses.
What about the CGT changes Reeves is threatening us with? Tax free gain levels have been reduced over the years by the Tories and are now apparently in for another reduction.
This will cause gradual erosion of someone’s capital unless you are a lucky investor whose gains minus tax will beat inflation?
It appears increasingly difficult to safeguard your savings. Taxed initially and then again and again.
Surely these increases in taxes will hit people’s pockets, reduce their spending and as a result cause an economic downturn?
Will this increase in employers pension contribution cause prices to increase? The money has to come from somewhere?
i am not an economist, so maybe a bit too simplistic in my thinking?
I should have used my annual ISA allowance as much as possible and then Jeremy kHunt’s raising of the CGT allowance would not have been an issue. Of course now, the concern is that Thieves will hit ISAs, most likely with a maximum pot size.
Two-tier-Keir strikes again.