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Sat Jan 12, 2013, 07:43 PM

Millions face tax hike under new pension plans

Millions of Britons could pay more tax under new pension plans expected to be proposed by the government, it has emerged.

The flat rate state pension will introduce a single pension of up to 155 per week for all pensioners regardless of the scale of their lifetime national insurance contributions. But, according to the Daily Telegraph, millions will have to contribute more in national insurance to pay for it, which will amount to an effective tax rise of 1.4 pence in the pound.

Those affected include 1.4 million workers in the private sector who are enrolled in final salary schemes and five million in the public sector who have "contracted out" of the state second pension and currently pay a lower rate of national insurance.

The new pension would remove the ability to "contract out".

http://www.guardian.co.uk/money/2013/jan/12/millions-tax-hike-pension-plans

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