The NI fund

The NI fund last year collected £129 bn in NI contributions from employers and employees. More than half came from employers. It paid out £110 bn on pensions and was left with a surplus after its small contribution to other benefits.

The pension itself is paid to people over retirement age based on their contributions. Some people are awarded  credits but most earn them by making tax payments from employment or self employment income.

If the government did abolish employee NI there would  be a significant shortfall in the NI to pay  the pensions. Government would need to set out how it would transfer money to the NI fund to keep  it solvent, or would need  to abolish it and take payments into its general accounts.

It will also need to set out who qualifies for a pension and how much pension they will be entitled to in a world where no one  is making NI contributions. It would be a bad idea to abolish all links  with work and taxpaying. There could be some  notional identification of Income tax on work income as a replacement qualification, or some calculation based on employer contributions per person.

It would not be fair to pay  anyone reaching retirement age a full state pension. That way a work migrant could come here to work the last couple of years, gain citizenship and then claim a full pension.

The residual contributory benefits would presumably go. There will need to be conditionality and qualification criteria for these benefits.

The whole point of the contributory pension was to link working with saving. The idea of the fund was to relate cost of future benefits to contributions over a working life. If the  aim is to eliminate all employee contributions the government needs to set out in a reform Green paper how a new system would be better, and how they will graft a new system for employees onto the old system of employer NI contributions. Meanwhile government needs to stress this is not a pledge or commitment to abolish employee  NI as they have not identified how that would  fit into OBR arithmetic.


  1. Mark B
    March 13, 2024

    Good morning.

    Well when looking for savings you could always cut the Overseas Aid Budget ? How much is that still costing us ?

    1. Peter
      March 13, 2024

      ‘ It would not be fair to pay anyone reaching retirement age a full state pension.’

      Perhaps not, but many get the equivalent of a full state pension – if you look at the benefit system – whether they make any contributions or not. There are unfortunates who are not in a position to work through no fault of their own. There are others who are manipulating the system.

      To add insult to injury, the state pension in the UK (for those who have actually paid into the system) is not particularly generous in comparison to other European countries. Look at it in terms of the state pension compared to the average wage in a nation and also when pension age is reached.

      1. a-tracy
        March 13, 2024

        Do you also look how much of their pay they contribute Peter?

    2. BOF
      March 13, 2024

      Mark B
      Not much hope of that while CMD bestrides the World.

      1. Mitchel
        March 14, 2024


        Well,I’m sure he would like to give that impression.

    3. Ian wragg
      March 13, 2024

      78% of women and 60% of men of a certain cohort never work but get all the benefits and we keep Importing more. Answers please

      1. Lifelogic
        March 15, 2024


      2. Diane
        March 15, 2024

        The number of working age people not in or looking for work stands at a decade high of 9.3 million. A large proportion of these classified in the media no doubt as ‘ Lazy Brits ‘ One assumes there is no real idea or stats of exactly the breakdown of these cohorts in our society.

    4. Mickey Taking
      March 13, 2024

      £15bn + more in defending attacks one country against another or against terrorism.?

    5. Hope
      March 13, 2024

      Third from last paragraph sums it up. Immigrants do not have to pay, then a cut off line for those above a certain income. A bit like you have done with child benefit. Your party give child benefit to EU citizens who never set foot here but do not pay parents over a certain limit even though they more tax!!!

      Care home fees and those who do not pay even worse. People sell their homes for care fees, next door who stayed at home in social housing not working taken to same care homes without any cost! It is hard to believe your party has got worse than communism.

      JR, the scam of people moving from rented accommodation to social housing continues, people falsely claim the split up and pay half the amount in social housing! But then criminals who enter the country illegally get put up in four star hotels, fail their asylum and now going to be offered bribe money to go to Rwanda!! What genius came up with paying criminals to leave the country rather than deport!

      1. Hope
        March 13, 2024

        Sunak and Hunt lie to say it pays to work! It has to be lies because the alternative is they are completely stupid.

        Rycroft still in post?

    6. Bloke
      March 13, 2024

      Large chunks of money paid to aid people entering the UK from overseas and living here is an added overseas aid expense that remains out of control of any budget.

    7. Ian B
      March 13, 2024

      @Mark B – according to the Daily Telegraph today Sunak/Hunt have found another way “Half a million pensioners are on track to lose £1,800 under the Tories as a stealth tax raid cancels out the benefit of the triple lock.”
      These Guys (Sunak/Hunt) have and are going to war with those that can’t top up their incomes with additional work, are to old to work and have the temerity to live past retirement age.
      Although with your point it should be Hunt/Sunak and the Conservative Government, that as a side-line are funding and encourage the criminal boat gangs to invade our shores, that should now be diverting the ‘Overseas Aid Budget’ to their aspirations of filling the Country.

    8. Hope
      March 13, 2024

      Business minister Holyingrake says it is a good use of our taxes to give criminals £3,000 to leave the country! That is a clear statement to show why he should not hold any public office or be in a position to influence the waste of our taxes. He must go- along with Sunak. This is our taxes at a 70 year high!

      Explain to us JR why criminals who have no status since legislation last year should apply or be paid to leave UK. Why has the legislation introduced last year not being used to deport illegal boat people it was designed for?

      Windfall taxes on gas continue when Sunak announces gas powered stations required to stop black outs! Again, is this not a good reason to save Holyingrake and Sunak?

      1. Donna
        March 14, 2024

        They’ve either never read The Danegeld (Kipling) or they are too thick to understand it.

        “IT IS always a temptation to an armed and agile nation
        To call upon a neighbour and to say: –
        “We invaded you last night – we are quite prepared to fight,
        Unless you pay us cash to go away.”

        And that is called asking for Dane-geld,
        And the people who ask it explain
        That you’ve only to pay ’em the Dane-geld
        And then you’ll get rid of the Dane!

        It is always a temptation for a rich and lazy nation,
        To puff and look important and to say: –
        “Though we know we should defeat you, we have not the time to meet you.
        We will therefore pay you cash to go away.”

        And that is called paying the Dane-geld;
        But we’ve proved it again and again,
        That if once you have paid him the Dane-geld
        You never get rid of the Dane.

        It is wrong to put temptation in the path of any nation,
        For fear they should succumb and go astray;
        So when you are requested to pay up or be molested,
        You will find it better policy to say: —

        “We never pay any-one Dane-geld,
        No matter how trifling the cost;
        For the end of that game is oppression and shame,
        And the nation that pays it is lost!”

  2. DOM
    March 13, 2024

    The contributory principle is now redundant. It serves no purpose in welfare dependent Britain. Thank the political state for this retrograde development. Thank ‘Stockholm Syndrome’ Labour. Thank ‘fearful for being labelled ‘nasty and uncaring’ Tory.

    I believe most have given up and couldn’t care less. Why should they when they see political and bureaucratic players acting in the same irresponsible manner?

    The world is a simple place. Defend your own interests at all costs. Failure to do so renders you a exposed to abuse

    1. Peter Wood
      March 13, 2024

      As our host describes it, then cutting NI appears a reasonable and sensible pension system, SO LONG as there’s an economic ratio of contributors to pensioners. NI was, and from the way this chancellor treats it, considered just another employee tax. So which is it? If you eliminate NI, then the funding has to come from somewhere else or there’ll be no state pension.
      Just heard government is thinking about PAYING illegal incomers to go to Rawanda voluntarily…hard to make this stuff up..

      1. Peter Wood
        March 13, 2024

        Not ‘cutting’ but ‘keeping’.

    2. Lifelogic
      March 13, 2024

      Indeed it largely is redundant. JR says “That way a work migrant could come here to work the last couple of years, gain citizenship and then claim a full pension” indeed but then they will probably get alternative benefits anyway if they do not get the pension housing benefit, council tax benefit, NHS benefits, the pensioner minimum income guarantee…

    3. Lifelogic
      March 13, 2024

      Many people pay voluntary NICs to earn a full pensions so should they stop, should they demand a refund for Government mis-selling?

      So the London Fire Brigade get new equipment after Grenfell Inquiry recommendations. Taller ladders, drones…
      The main thing needed was someone in charge who was not a complete idiot. It was blindingly obvious very early in the fire from a 30 second glance at TV footage that all people should have been told to get out then and not go back to their flats for hours.

      Also it was moronic to spend hundreds of millions on insulating the building to save virtually nothing in energy anyway. Especially with flammable insulation approved by building control. Plus they failed to fully put out the initial fire fully. Needless to say many firemen are demanding compensation! Almost entirely a gross failure of Government from top to bottom.

      1. a-tracy
        March 13, 2024

        What is the failure of government Lifelogic? Following EU approved insulation cladding to high rises to cut energy use?
        How did the government tell the fire chief that night to tell everyone to remain in their flats with the out of control fire raging outside? One resident held off the fire themselves pouring bowls of water all over her flat window.
        That same flammable insulation cladding was all over the country used by as many Labour councils as Tory ones, people left now with unsellable flats even though new builds are supposed to have NHBC insurance (where did all that money go if not into an insurance pot).

        I would prefer time is now spent deciding what to do with the building, does the steel work have to be brought down? Can it be rebuilt? Were the flats insured for fire? Surely the private ones were?

        1. Lifelogic
          March 14, 2024

          Failure of the state sector I perhaps should have said. Of Government, local government, building control, the climate alarmist insulation agenda, the fire brigade leadership sending people back to their flats and telling them to stay put, fire safety certification…

  3. Cheshire Girl
    March 13, 2024

    We need to get all those, who are choosing not to work, with spurious, hard to prove, ‘illnesses’ back to work, and contributing.

    Also, we need to stop giving so much money away, to the rest of the World!!

    I am aware that my views will not make me popular in some circles, but at 84, and paying full Income, and Council Tax, I am fed up with my money being taken, to subsidise some dubious causes, which the Government has chosen , with no input from the Taxpayer.

    1. margaret
      March 13, 2024

      For example 1) the systems have changed now we don’t have the details
      2) You will have to follow this up with your old employers( who don’t exist) from 40 years ago.
      3) Employer ;It is not our responsibility it is the states . We don, have information dating back to 40
      years ago , we only keep 10 years information .
      4) organisation has change now , we are employed by private owners who don’t go back that far.
      5) its up to the individual to keep a lifetimes proof.

    2. Ian Jacobs
      March 13, 2024

      with no input from the Taxpayer.

      I don’t think you meant that. Presumably you meant ” to subsidise those who may not have contributed ”

      Your comment is disrespectful – particularly to GP’s who sweat blood to try and help their patients recover from illness and get well enough to be able to be considered to re-join the workforce . Your first sentence suggests that
      many GP’s ( especially GP’s but other Dr’s as well ) sign people off for no very good reason at all. That is nonsense . What you refer to as “spurious and hard to prove ” illnesses are most likely psychological disorders
      or psychological responses to their illnesses or injuries. These conditions are identifiable and are amenable to
      help – but do require patient involvement and commitment to get well again.

      I suspect you might well be thinking of ” long covid ” as a spurious and hard to prove diagnosis/illness.

      How wrong you are .

      1. Cheshire Girl
        March 14, 2024

        No, I wasn’t thinking of Covid. I was thinking of ‘mental health’ problems. Apparently, a large cohort of 16-24 year olds have a problem with this.I didn’t mention Doctors. I merely said these problems can be hard to prove.

    3. Everhopeful
      March 13, 2024

      Your views are highly popular with me!
      See now the powers that be think they may solve joblessness by “calling up” youngsters.
      They haven’t got the faintest idea of what they have bred.
      (The sudden idea apparently is that youngsters owe allegiance to this country! After the last 20 years even I wouldn’t agree with that)
      Not a Scoobie.
      And really…are there any Sergeant Majors left?

    4. Bingle
      March 13, 2024


    5. Dave Andrews
      March 13, 2024

      Who would want to employ the workshy? I wouldn’t. I want people willing to work, not the kind of person who clockwatches or is always looking for ways to fabricate a health and safety or discrimination case, and collect from the lucrative compensation claim industry.
      The government needs to revisit employment law to make employing people more attractive. Currently the employer is responsible for every stupid thing an employee might do. Time for employees to take responsibility. If they want to climb into operating machinery or engage in sexually charged banter it’s not the employer’s fault.

    6. majorfrustration
      March 13, 2024


    7. acorn
      March 13, 2024

      Of the roughly 44 million working age (16 – 64) population, 9.2 million are not working or looking for work! That’s a lot of citizens feeling disenfranchised and demoralised. And; it only took since the 2008 crash to achieve it.

      UK is supposed to spend 0.7% of national income on overseas aid (£17 billion), but dropped it to 0.5% in 2020. Over a quarter of it was spent on refugees in the UK.

    8. Lifelogic
      March 13, 2024

      Any giving so much money away to migrants, people who choose not to work and mad agendas like Net Zero, HS2, net harm Covid Vaccines, the many worthless degrees, road blocking, EV and heat pump subsidies…

      1. Peter
        March 13, 2024


        Hello. I was wondering whether you were going to post about Allister Heath in the ‘Daily Telegraph’ on ‘The Conservative Party is finished’ and Nigel Farage.

        I would agree with the first paragraph of the article – unless Conservatives can do as George Galloway suggests and use the Gaza issue as a wedge to undermine Labour. This would have to be done by planting stories in the media. The Conservatives should not engage in a debate on the issue themselves.

    9. Madge
      March 13, 2024

      I agree with Cheshire Girl. I’m sure those working and paying income tax would support a big cut in unemployment/non-working benefits to encourage these people to rejoin the workforce. Does the current “government” not recognise this?

    10. Lifelogic
      March 13, 2024

      Not just “dubious” causes but totally and clearly insane ones in many cases doing huge net harm.

    11. JoolsB
      March 13, 2024

      + 1. I think your views will resonate with most people who are being taxed to the eyeballs to pay for those who choose not to or who have just turned up on our shores. Like you, I’m a pensioner paying full income tax and full council tax, on below average income but penalised because I have been stupid enough to save for my old age and have savings whereas those who don’t bother get everything handed to them on a plate. But why are we surprised? It’s what socialist Governments do and they don’t come more socialist than this one.

    12. Chris S
      March 13, 2024

      Well said!

      There are so many areas that could be cut if there was the willpower to reduce unnecessary spending.

      The Foreign Aid budget should be top of the list and HS2 and the £40bn extra to be spent in the North should be next.

      Then there is the Barnett Formula that hands billions of exclusively-ENGLISH taxpayers money to the devolved administrations for them to waste.

    13. Ian B
      March 13, 2024

      @Cheshire Girl – unfortunately you joined this World before the Socialist Conservative Government spread the disease of ‘entitlement’ before contribution. If some one has earn’t something with endevours and handwork this Conservative Government will ensure you are reward by entitlement of the same. The great giveaway Country

  4. Javelin
    March 13, 2024

    My conclusion from this is that the Government are going to make the state pension means tested rather than contributory because there are a large number of immigrants who will not be receiving the state pension.

  5. Roy Grainger
    March 13, 2024

    I assume the reason Hunt wants to abandon the contributory element of pension entitlement is so he can make the pension means tested and so save money by paying out less.

    1. KB
      March 14, 2024

      Agreed, I think that is what they are up to also.
      Millennials hate boomers and object to paying NI to pay pensions to their slave-masters. This is how they see things. Hunt is pandering to them.

  6. Sir Joe Soap
    March 13, 2024

    Can’t argue with this and there’s no evidence it’s been thought through.

  7. agricola
    March 13, 2024

    The way you write about NI suggests it is a ring fenced tax, whereas I understand it to be just another way of applying a tax that ends up in the Treasury pot. Whatever, it results in the worst state pension scheme in Europe.

    Were it ring fenced it could be invested in UK private industry to produce a return and ultimately a better pension for contributors.

    Had HMG shown the wisdom of the Norweigan government they could have collected a levy from the North Sea oil and gas operation to create an enormous social welfare fund that, invested would have contributed handsomely to what is now seen as a problem. The quality of intellect in our government prefers virtue signalling, piss against the wall projects like HS2. PPE stands for Piss Poor Execution of any government project.

    The third error of HMG over many colours and years was to add a burden of benefits which now extend to 20 million people. You have created a dependant client state. Had you run all that government activity with an ounce of ability you would not have to chase its errors with benefits. The business plan for the ultimate cost of our own fuel for instance.

    The fourth gross error was to back load the population with immigrants, legal and illegal, just so that any social welfare project would look like an overloaded Dehli to Agra train.

    Little wonder that our electorate are showing disdain for the incumbent political parties who in turn, realising their imminent demise are flaying about like rats in a sack.

    1. KB
      March 14, 2024

      NI is a ring-fenced tax. It is accounted for separately to taxation and can only be used for defined purposes.

      1. RDM
        March 14, 2024

        NOT TRUE, and you should not be allowed to propagate a deliberate falsehood!

        It is collected by HMRC, held by the Treasury, and spent on general Government consumption!

        1. KB
          March 14, 2024

          What I said is true. Look at JR’s article, there is a separate accounting process for the NI fund. It is a hypothecated tax and, by law, the fund can only be used for state pensions, contribution-based benefits and the NHS.

  8. Old Albion
    March 13, 2024

    I wouldn’t get in a stew about it Sir JR. Hunt opened his mouth without engaging his brain when he suggested scrapping NI. Anyway when Labour take over later this year, the whole idea will be ditched.

    1. a-tracy
      March 13, 2024

      Old Albion, you are not paying attention. Labour are very much into means testing state pensions, a lot of their mouth pieces want to cancel the triple lock completely, they would prefer to pay more in pension credit and less to those who paid the most in. I don’t know why Hunt is doing their dirty work for them.

  9. Ian Jacobs
    March 13, 2024

    Thanks John,

    A clear explanation and the figures are interesting.

    Would it not take years to sort the implications of such a change out and to ( finally ) get the
    new scheme up and running ?

    If it ain’t broke don’t fix it.

    Honestly- it seems a crazy idea – is probably a Tory introduced distraction but maybe by looking at the issue
    all sorts of other implications of such a change would become apparent.

    I am a retired GP and the number of times( the more entitled ! ) patients said something like. ” I have already paid
    my dues to the NHS by paying “my stamp ” ” and so can have free NHS care for the rest of my life.

    Many citizens fail to realise that existing NI contributions are not ring-fenced payments into ” the NHS pot ” but
    are really just another tax ( and a route to a retirement pension )

  10. Everhopeful
    March 13, 2024

    Apparently there is a “pension crisis” which rivals “climate change” in the horror stakes.
    There is also allegedly a huge shortfall which could not have anything to do with year on year careless administration.
    The advice from, Davos for several years, has been to raise the pension age. 80 years old is now in sight!
    Is this where the new pension system came from?
    Anyway…life expectancy is rising and not a thing to celebrate because the way the elites have organised things ….it is too expensive!
    Japanese life expectancy is 107 years old…WHEW! 45 years retirement!!
    All rubbish “models” no doubt.
    Have they keyed in “sudden death”?

    1. KB
      March 14, 2024

      Obesity will save us from the demographic crisis. Life expectancy will be definitely declining in the future.
      The current generation in their 80’s and 90’s were rationed when young and most remained slim. Following on from them are generations who have had too much to eat basically.

    2. Ian Jacobs
      March 15, 2024

      Your response is ridiculous in various different ways.

      If you are stating or calculating life expectancy you need to state what age you are checking out . No matter
      how old you are-you still have a life expectancy . So- at any point in time- the life expectancies for males and females afed 1, aged 10 , aged 20 aged 60, aged 65, aged 70 varies considerably. If you don’t believe me – check it out .

      And the ONS figures clearly show that UK Life Expectancy has actually now stopped rising – and is actually falling for those in their 60’s /70’s and 80’s . Whether that is just a Covid effect we will have to wait and see – but I suspect that the trend has well and truly turned downward .

      If that is the case , HMG expecting that they can goi on raising the retirement age is a non- starter and would be
      completely at odds with the ( to be announced ) stats.

  11. Sea_Warrior
    March 13, 2024

    I’ll suggest that migrants should only be eligible for naturalisation after five years as a NET CONTRIBUTOR to the public purse. Today, citizenships are being given to all those stepping over a very low bar. And that’s part of the reason why we are being inundated.

  12. Javelin
    March 13, 2024

    FYI. There is a crisis brewing in relation to Companies House. It turns out that Companies House has not verified directors identities and has been open to large scale criminal fraud.

    Companies House have said they might verify some directors. HMRC and the police are aware but it is not being publicised.

  13. Mike Wilson
    March 13, 2024

    You’ve hit the nail on the head in your piece today. Clearly the idea of abolishing NI is to make sure the 10 million you have ‘invited’ here in the last 20 years get a full pension regardless of the valuable ‘contribution’ you keep telling us they make.

  14. Donna
    March 13, 2024

    Before any changes are made to the State Pension, the Government should announce its plans to scrap the overly-generous and unaffordable Public Pension schemes ….. including the Gold Plated Scheme for MPs and the oh-so-special Director of Public Prosecutions.

    Their pensions should be no more generous, and subject to the vagaries of the Stock Market, just like they are in the private sector.

    The NI / IT plans are clearly a pre-cursor to the gradual means-testing, and then phasing out, of the State Pension; a policy which they don’t dare mention.

    1. JoolsB
      March 13, 2024

      + 1 Donna

  15. Mickey Taking
    March 13, 2024

    The whole subject was only raised by Sunak to appear to make him wishing to hand us taxes back.
    Deception at its worst.

  16. Mike Wilson
    March 13, 2024

    Just read your last line ‘fit in with OBR arithmetic’! Good one.

  17. JayCee
    March 13, 2024

    I would suggest their is an argument in favour of more hypothecated taxes rather than less.
    Maybe we should have a flat rate taxes on all income and benefits to pay for the NHS. After all state pensions are taxable, why shouldn’t other benefits be so.
    Another separation could be a flat rate local income tax on all income and benefits set by the local authority based on a Government defined national income per capita.
    The taxes for central government services and welfare benefits would be on the present progressive tax basis with personal allowances but again on all income including benefits.

  18. Donna
    March 13, 2024

    And the latest idiotic suggestion from “Stop the Boats Sunak.”

    “Failed asylum seekers to be paid £3,000 to move to Rwanda
    Failed asylum seekers are to be offered £3,000 to move to Rwanda under a voluntary scheme drawn up by the Government to help clear the backlog of migrants stuck in Britain.

    The new agreement with Rwanda, which is separate to the stalled deportation scheme, is aimed at removing thousands of migrants whose claims have been rejected and cannot remain in the UK, but are unable to return to their own country.”

    What an incentive to get on a dinghy. You can just imaging the People Traffickers’ next TikTok advertisement; ”

    “Have a nice holiday in the UK at taxpayers’ expense – earning in the black market whilst here and getting “free everything” – and then you’ll be given £thousands to move to Rwanda.”

    And all because the virtue-signallers in the Uni-Party refuse to leave the ECHR and deport the criminals back to France, whence they came.

    1. Hope
      March 13, 2024

      The legislation introduced in August last year meant illegal boat people have no status or right to apply to stay here!! So is the legislation of no use, ECHR above all and any legislation?

      Just imagine if you live in and around of Rwanda, come here, stay in a four star hotel, legal aid provided, apply and get £3,000 to go home! What could go wrong!

      Idiots who thought of the scheme against legislation in place last year need to be deported or give. £3,000 to go!

    2. Timaction
      March 13, 2024

      Indeed. The ONLY solution is the simplist. Tow back or return illegals to France the same day. Tell France they have failed to secure their borders and consider this a hostile act. Sanctions to follow if refusal. Have their Ambassador in to tell them. Our weak, useless, woke Uni Party have to go. Reform.

  19. Bloke
    March 13, 2024

    Government controls how much money people receive. Shuffling it around in different complicated pots just creates expensive muddles.
    Simple efficient rules would cut out the waste and add value.
    Abolishing OBR arithmetic would be a start.

  20. J+M
    March 13, 2024

    If we work on the basis that NICs are supposed to meet the cost of the state pension, why doesn’t the government invest the surplus to generate income for future payments. Over time a real fund would build up. As usual the problem is that the Treasury cannot keep its piggy little fingers out; that’s why we have gone from having one the best private pension provisions in the world to one of the worst. If first Nigel Lawson had not acted to limit the size of the surpluses and then Gordon Brown had not intervened to remove the tax credits on dividends, we would still have private final salary schemes.

  21. William Long
    March 13, 2024

    The proposal to end NHI shows all the signs of an announcement made to catch the eye of the voter, without any of the consequences or implications having been thought through. Interesting that the Labour Party have barely bothered to comment.

    1. Timaction
      March 13, 2024

      Any one would think there’s an election coming up. There is but the Tory’s are toast. They’ve betrayed the Nations, particularly English people.

  22. RDM
    March 13, 2024

    “Fund”, What Rubbish!

    It is not held in a Fund, at all!

    It goes straight into a Treasury Account, and is used as with all Government spending!

    There is no effective “Contributory” principle! If there were, the State could not offer, even some, Insurance!

    It is, in fact, a Ponzi scheme!

    You are telling this too you’re Supporters, they must be stupid, but Only the Rich can benefit, which is the real reason this country is so imbalanced!

    This country is not growing enough, not efficient enough, to cover all it’s costs! Even extra costs we currently need! BA/RN/RAF/MOD!

    And, these lies are the reason you’ll be kicked out, come the next GE!

    You can’t have you’re Trickle Down, Selfish nonsense!
    As with Cut’s in IHT!
    Restricted House building, and artificial house prices!
    No Wealth Taxes (Not I would agree, but needs must)!

    The Economy has too Work for everyone, everyone that puts the work in, because “Work Pays”!
    Not because stupid Politicians are too lazy too explain the real Position we in!
    Not just the Expectation of you’re supporters!

  23. Bryan Harris
    March 13, 2024

    There is a really easy answer to all of this. NI can be merged into an employee tax, which would simplify our lives.

    Rather than continue with PAYE, with all the extra expenditure that entails in terms of company resources and tax collectors, let’s simplify the whole thing by taking PAYE tax directly from employers – they would be taxed on number of employees and average payment, including bonuses and overtime.
    The amount of tax per employee could be varied to suit HMG requirements.

    Employees would be paid the same amount as before, plus any extras. Employers would record the names of all people in employment by them every month, so that HMG knew who had earned a full pension.

    To do away with personal taxation would be a major boost, and part of an innovative switch to revamping VAT as well. Other ‘earned income’ would be taxed at a flat rate at source.

  24. glen cullen
    March 13, 2024

    You’re trying to fix the NI balance sheet …..stop it, scrap the tax of NI and combine with income tax ….stop trying to fix something thats broke

    1. KB
      March 14, 2024

      NO, the contributory principle needs strengthening, not removing ! We need to make work pay.

      1. RDM
        March 14, 2024

        More rubbish! There is no “Contributory Principle”, just spending by the Government, of all NI!

        “Making Work Pay” ? While we are still so aligned with the EU Customs Union and Single Market Rules? The cost too live is just to high! We need major Reforms, but, as was with the 80’s de-industrialisation, there will be many, Born and Bread GB citizens left behind, no Savings, stuck in expensive Rented accommodation, and needing benefits just to survive! Which is the real reason they brought in Universal Credit, and the resulting State Dependency!

        Is it their fault, do they know any different? Next, you’ll be cutting Benefits, on the one hand, and Scrapping British Primary Steel making in Port Talbot, on the other! With out these High Wage jobs, they too will become State Dependent!

        Surely, British Primary Steel making is in the British Interest? Politicians just have to accept we can’t allow Dumping (Market Capture) of foundational industry’s?

        Here we go again!

  25. Ian B
    March 13, 2024

    The big imbalance comes from the NI Fund and its payouts being used for electioneering purposes first and foremost. Then of course running it as a strictly Ponzi scheme that in itself would be criminal if anyone one other than our legislators were involved.
    The reasoning for NI doesn’t go away just because Sunak/Hunt and this Conservative Government refuse to manage.
    Us all going private 100% works, but is politically sensitive. Without NI the system of benefits would be more overloaded than it is now, we already have a large contingent that do see the need to contribute to themselves or their communities – with no NI and that will grow further.
    As this, as with previous governments are just lazy, don’t have the were with all to manage there is a need for NI to be reinforced as an investment fund, where contributions also earn. But Politicos of any description should be kept well away. In the long term that would remove the need for fudges (triple lock etc.) as payments would be dictated by growth and earnings. The big problem there is moving from a Ponzi scheme to a wealth fund – that will cost,
    Then again the Sunak/Hunt direction is taking us (remembering we have 2 rich individuals that would never be affected here) and with a bit of honesty all NI contributions collected would need to be returned as the contract would have been broken by Government.

  26. Ian B
    March 13, 2024

    “It would not be fair to pay anyone reaching retirement age a full state pension” it would appear that those that don’t contribute already have their benefits topped up to match those that do. Which then suggests why should anyone contribute?

    Out of a working population of 33million the UK has 6million people receiving benefits. Weirdly the 12.5million receiving their a pension from their own contribution are suggested to be just on benefits. Is that the Governments perceived problem they see those that paid in are getting a return – so must be stopped.

    1. Mickey Taking
      March 13, 2024

      The UK’s economic inactivity rate was 21.8% between November and January, marginally higher than a year earlier. It means 9.2 million people aged between 16 and 64 in the UK are not in work nor looking for a job. The total figure is more than 700,000 higher than before the coronavirus pandemic.

  27. THUTCH
    March 13, 2024

    The solution is simple – keep the contributory principle. But reduce the NI rate to a level where it is almost meaningless – say 2 or 3%. And maybe increase the qualifying years needed for a full state pension to 40 (currently it is 35).

  28. Bert+Young
    March 13, 2024

    Every person should always have a view on their future – certainly from late teens onwards . Providing for financial security is a must and those of us who are already pensioners know how important this is . Every Government has the responsibility for the entire population and must implement an economic programme of balance to deal with all the challenges short and medium term . As things stand this is not the case with the Sunak/Hunt regime who have focused only on those at work and to the detriment of industry and to those who have already contributed . We now badly need a leadership capable of restoring our economy and the trust of every citizen of all ages .

  29. Derek
    March 13, 2024

    LOL. I did wonder about the shortfall in pension funding when NI was abolished, but yet again SJ has exposed this government’s lack of forethought before announcing new polices. They sound just like Blair these days, when they reveal questionable policies ‘on the hoof’.
    A pity, way back when North Sea Oil was discovered, that this country did not adopt the same plan the Norwegians created. Their own Sovereign Wealth Fund, which took the proceeds from their oil sales and invested the money on behalf of the Norwegian citizens.
    Today, the Norwegian Sovereign Wealth Fund is now worth over £1 Trillion. If only the then Labour Government had copied their example. If, if, if.
    However, I do note since, not one of the then PM, Harold Wilson’s successors, have taken steps to introduce our own Sovereign Wealth Fund. I do question why not, and now I fear, in 2024, it’s too late.

    1. a-tracy
      March 13, 2024

      Derek, the UK had a country to rebuild after two world wars and big bills to the Americans to pay back that only stopped in 2006.
      “On 31 December 2006, Britain made a final payments of about $83m (£45.5m) to the US and about $23.6m to Canada. By the end of World War II Britain had amassed an immense debt of £21 billion.”
      I don’t recall if Norway was as involved in the war or up to its necks in debts trying to save Europe from fascism.

      1. Derek
        March 14, 2024

        And WW2 was a good reason not to invest in the country? LOL the proceeds from oil were not used to pay down debt, or were they?

        1. A-tracy
          March 14, 2024

          By the end of World War II Britain had amassed an immense debt of £21 billion. Much of this was held in foreign hands, with around £3.4 billion being owed overseas (mainly to creditors in the United States), a sum which represented around one third of annual GDP. During World War I the British government was forced to borrow heavily in order to finance the war effort. The national debt increased from £650 million in 1914 to £7.40 billion in 1919.

          This war debt wasn’t fully paid off until 2006. The Kingdom of Norway still had debts left over from fighting the Second World War when oil revenues started to flow in the 1970s. Rather than paying that debt off early, the government decided to let the terms of the loans and bonds continue to their planned settlement dates Read more at: I don’t have the figures or enough knowledge of where to look to do side by side comparisons.

          There was a large amount of investment in the rebuilding of Britain, all of those social homes that were built in the UK had to be funded. The pensions. The new national health service, all the new schools. In the 1960s there was massive development of mostly ugly shopping centres and brutalist flats.

          By the end of the war, the economy of the United Kingdom was one of severe privation. More than a quarter of its national wealth had been consumed. When you look back now, with hindsight if the choices were in the current day would Britain fight? There are many questioning our money and resources going to the Ukraine.

          I’d love someone to do a full delve into what the UK spent the money on.

  30. Ralph Corderoy
    March 13, 2024

    ‘The NI fund… was left with a surplus’

    What happens to the surplus? It could be ring-fenced and build up over time. That’s what would happen if NI were really a pension scheme.

    ‘The whole point of the contributory pension was to link working with saving.’

    Why should the Government run a faux pension scheme? You often point out how poor it is at running other enterprises. The availability and understanding of pensions is very different now to when a pension for the most long lived was first dangled before voters by politicians.

    1. a-tracy
      March 13, 2024

      The NI payment is not supposed to be just for pensions, it is also supposed to pay for Healthcare!

      1. KB
        March 14, 2024

        The original purpose of NI was to pay “contribution based” benefits, and the state pension. Since they 1990’s they have been dipping into it for a relatively small amount of NHS funding (that should never have been allowed). However, Sir John has given you the figures in his article, and you can see for yourself the vast majority of NI is used for the state pension.

        1. A-tracy
          March 15, 2024

          I wonder how much of the figure John gave was just for the basic state pension, not pension credits for people who haven’t contributed sufficient national insurance payment, I suspect pension credit benefits are in the same figure and they shouldn’t be.

          Also does the pension bill include the public sector pensions? Do you know KB?

          The figure for pensions from NI fund does not include public sector work pensions nor pensioner benefits.

  31. Eric Davies
    March 13, 2024

    National Insurance is a misnomer. It is not insurance in the way people understand it where you pay in to build up a pension pot. Today’s contributions go to fund today’s pension payments. Were it not the government running it, I doubt it would be legal. (Today’s investors funding today’s dividends.) Too late now to create a proper system of equity build up which should have been done long ago. I think that not enough politicians understand real money, I suspect because they’re so used to spending other people’s. Sir John is the exception. Thank goodness for his insights!

  32. Christine
    March 13, 2024

    Ask how many people who live abroad receive UK benefits which give them free NI credits which will give them a UK state pension. You will be shocked by the answer. The UK must be the most stupid country on the planet.

    1. KB
      March 14, 2024

      I am asking, what is the answer (and where have you found this information) ?

  33. Keith from Leeds
    March 13, 2024

    The paucity of thinking by the Chancellor and PM is amazing. Logically, NI should remain, but it would be good to see it reduced for employers as it is a vicious tax on jobs.
    But what is lacking is any joined-up thinking or bold decisions on the UK finances. At some point, we must stop spending more than we earn, but it will take a tough PM and Chancellor to make and stick to the very tough decisions needed. I don’t think either of the current incumbents has a clue.
    No wonder the Conservatives are consistently behind in the opinion polls and consistently losing by-elections in seats with good majorities.

  34. a-tracy
    March 13, 2024

    How much of the £110bn was paid out in pension credits?

  35. a-tracy
    March 13, 2024

    “That way a work migrant could come here to work the last couple of years, gain citizenship and then claim a full pension.”

    They get more than a State pension anyway, when you take into account ‘pension credit’, housing benefit, free council tax because they get pension credit. The pension credit element is the £3,900 pa governments expect retired people to live on after their living costs.

    1. hefner
      March 14, 2024

      ‘Migrants working the last couple of years’ would get a state pension pro-rata of the number of years they had been in the UK, and this only if they have more than 10 years of NI payment
      ( 18/09/2023 ‘State pension, what is it, how much to you get and can you boost it?’

      As for the UK nationals abroad 25/01/2024 ‘Benefits and pensions for UK nationals in the EU, EEA and Switzerland’.

      1. A-tracy
        March 15, 2024

        Are you saying Hefner they don’t get housing benefit after retirement and they’re thrown out on to the street, that they don’t get pension credits because you’re wrong. I had someone in the family that gave loans to people and they were amazed by the amount of benefits some people got.

        If you strongly believe you are correct tell me what happens to people that have lived in the uk 10 years, not built up a national insurance pension and rents a property when they lose their job over or near retirement age?

  36. Mickey Taking
    March 13, 2024

    Off Topic …. PFI.
    A head teacher has asked “how difficult is it to bake a potato?” in a despairing letter to parents about the state of food at his own school. Jason Ashley, head of Redbridge Community School in Southampton, said meals served in its canteen were “completely unacceptable”. He blamed caterers Chartwells for the issues and said he had no control over what was on offer to pupils. The firm has apologised and promised an “immediate action plan”.
    Mr Ashley said meetings had been held to try and improve food quality.
    The head, who has also complained portion sizes have been getting smaller while prices were rising, said several meetings had been held with the private catering company to try to improve the situation.
    Mr Ashley added he was “angry and disappointed” at the provision of meals and apologised to parents of the foundation secondary school, which caters for children aged 11 to 16.
    “For many of our students, a school meal is so important to them but I can no longer tolerate, provide reasons or even justify to you the unacceptable nature of the food,” he said.
    Support services at the school are provided under a Private Finance Initiative (PFI) contract, with a management company determining the contracts for a range of activities including provision of food and meals.
    “Ongoing catering issues” was one of the problems Mr Ashley raised at a meeting in November, discussing PFIs in Southampton schools. Southampton City Council confirmed that schools within the city generally manage their own catering contracts, but those with PFI contracts have “little or no control over the quality of the services provided”.

  37. Rod Evans
    March 13, 2024

    Sir John, I read your published views and wonder, would it be sensible if you joined a Conservative Party?
    I ask because Lee Anderson recently made that decision and you do seem to embrace many of the same ideas.
    Just curious….

  38. glen cullen
    March 13, 2024

    I’ve waited a decade for your pressure on the government to take effect ….it hasn’t, the government isn’t listening to you, they’re not interested in your views or the views of the membership …there just isn’t any point in flogging a obstinate donkey any longer …I no longer expect anything from this government except high taxes, high immigration, high energy bills and a labour government ….your lobbying just hasn’t worked

  39. Chris S
    March 13, 2024

    I said yesterday that the idea of eliminating NI contributions had not been thought through. That was an understatement !

    The biggest risk is to current recipients of the state pension. The only way to pay for the abolition of NI would be to increase Income Tax.

    That would mean that recipients of the state pension would then have paid twice : once by paying NI throughout their working life, and again through the new higher rate of income tax when retired.

    I would not trust any government to put safeguards in place, like a higher personal allowance for those in receipt of a state pension.

    On the first occasion that a chancellor was looking for savings, it would be the first thing to go.

    Upon reflection, it seems to me that maybe it is, after all, a carefully thought out cunning plan to cut the cost of pensions being paid out today by the back door.

    Retired people are not stupid and if this is in the Conservative manifesto, the party will lose millions of votes from your most loyal supporters.

  40. John Downes
    March 13, 2024

    I’ve got a wild idea.
    How about we abolish NI contributions entirely, and take the 8% (previously 10%) off everybody, and hand it to an independent pensions provider, who invests it according to the wishes of the employee? At retirement age, the former employee receives a pension, paid from the pot he has accumulated over his lifetime. Is that too crazy?

    1. a-tracy
      March 13, 2024

      John, what tax replacement would pay the pensioners of today?

    2. KB
      March 14, 2024

      Because there wouldn’t be any money to pay the CURRENT pensioners, that’s why.

      1. John Downes
        March 14, 2024

        To KB and a-tracy; You are both right. There would be no money for current pensioners because governments of both parties stole it all in the past, and spent (or more likely wasted) it on something else. Existing pensioners would have to be paid out of general taxation. If that means cutting back in other areas then that would probably be a good thing.

        1. A-tracy
          March 15, 2024

          John, politicians don’t know how to cut back.
          Germany has the same sort of pension that current insurance payers pay the pensions of the retired. They pay a lot more payroll taxes than we do in order to increase the portion of workplace pension. France is in denial. It’s all going to go 💥 and by far the biggest losses are paying out pension credits and public sector pensions that don’t have an investment pot built up.

          So all those big fat public sector pensioners on over £25k pa in retirement will be expected to start paying more on that than 20% tax.

    3. Berkshire Alan
      March 14, 2024

      Millions of people have trusted privately run Banks, Building Societies, and Insurance Companies with their money/savings, some of these organisations have failed miserably, others have failed spectacularly, some have been bailed out with taxpayers money, others have not.
      Be careful what you wish for, not every private organisation keeps your money safe.
      To name but one of each of the above RBS Bank, Northern Rock Building Society, Equitable Life Insurance Company.

      1. John Downes
        March 14, 2024

        All very true. Insurance and banking are the most tightly supervised and regulated industries in the country, and they still fail from time to time. I look on that as a failure of the regulators and the Bank of England, for which the government is responsible. It was also the failure of the managers of the companies concerned, for which the legal framework (laid down by the government) is also responsible. How come Fred Goodwin was able to retire on a 6-figure pension? Because the government, which makes the law, decided that the law demanded it. If, instead of a huge pension, he had been handed a demand for reinstatement of the losses for which he was directly responsible, then those losses might not have occurred in the first place. So it all comes back to the government, which must take responsibility for its failure in this (and so many other) areas.

  41. Paula
    March 13, 2024

    It’s over really.

    Sweeping up the shop last night near the close of shift. The usual man-children come in hyped up and high-fiving their mates to buy their alcohol, smokes and sweeties for a PM/AM of oblivion.

    One cannot imagine these people holding down a job.

    Where do they get the money ?

  42. glen cullen
    March 13, 2024

    Its happened again, my petrol station has put up its prices by another 1p today …£1.50p petrol and £1.60p diesel ….how much is the government now making on VAT on fuel ?

  43. Original Richard
    March 13, 2024

    I expect paragraph five second sentence explains why Parliament, the Civil Service and all our institutions and charities want NI changed.

  44. hefner
    March 13, 2024, Mark Shoffman, 12/03/2024 ‘What to consider if you plan to unretire’: very depressing …

  45. Peter Gardner
    March 13, 2024

    I am surprised, Sir John, you do not consider in this article the role of private pension funds. As it is, your post seems to assume that provision for retirement is exclusively for governments to fund by means of taxation. What am I missing?

  46. Reform_Now
    March 15, 2024

    I agree with every word and have posted those thoughts here too, recently.

    Two points to add:

    1. Thanks to Labour, many years ago now, those receiving out of work benefits receive State pension entitlement because there’s a notional deduction of tax/NI.
    As an example, if someone on the dole was paid £69 a week in the old system, then the replacement paid them £100, deducted tax and NI at 20% and 11% respectively – the end result is such that they still received £69. But… now the notional NI has given them all the entitlements that go with it, including State pension – all without doing any work.

    2. The aim of this is not really to abolish NI, but to abolish pensioner’s right not to pay EE NI.
    If they instead increase income tax, they will draw pensioners into the tax net without having to make the difficult announcement that they are abolishing the pensioners’ right to not pay NI. Political chicanery. And morally reprehensible.

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