From 6 April 2016, National Insurance Contributions will rise from 10.6 per cent to 12 per cent on earnings between £5,824 and £40,040 for those employed in the Teachers’ Pension Scheme and Local Government Pension Scheme.
The rise is due to the introduction of the new single tier state pension. Before April 2016 the state pension was made up of two parts – the basic state pension and the state second pension. Teachers were ‘contracted-out’ of the state second pension and so paid a lower rate of National Insurance.
The end of the state second pension means there is no pension to contract-out from, therefore no justification for a lower rate of National Insurance.