The Government is increasing employers' National Insurance contributions to 12.2 per cent, prompting calls for IFAs to review their clients' pension arrangements urgently.
The Chancellor is radically restructuring the NI system. Under the new regime, employers only pay contributions over the new lower earnings' limit of £81 a week.
Brown ditched the system of four separate levels of employer NICs, replacing them with a standard 12.2 per cent rate. Previously, the maximum NI contribution was 10 per cent on earnings between £64 a week and the upper earnings limit of £485 a week.
Life offices are urging IFAs to hold emergency meetings with clients over pension arrangements. They believe IFAs should advise clients to boost pension contributions to avoid paying the higher level of NICs.