Will the Chancellor widen the public-private pension gap?

Could Rachel Reeves really be so brazen as to lumber private sector employers with having to pay national insurance contributions (NICs) on their employees’ pension contributions – but to spare public sector employers the same burden? That is what is being reported this morning. It has been suggested that, in next week’s Budget, the Chancellor will announce the end of an exemption for private sector employers, which currently ensures employers don’t pay NICs on pension contributions. At the same time, Reeves is proposing to instantly compensate public sector bodies so they are effectively spared from have to bear the burden.

This would be crass for two reasons. Firstly it would be a clear breach of Labour’s manifesto promise not to raise NICs (as well as income tax and VAT). Secondly, it would drive an even deeper wedge between public sector pensioners and private sector ones. If you are lucky enough to have a private sector pension, you have been able to shrug off poor investment returns in recent years. FTSE