‘DB schemes will lose out in pension reform’

Ms Lynch, partner of London-based law firm Sackers, said while moving the reforms forward to 2016 would help thousands of women, it also meant people in defined benefit schemes who were planning to contract out have been hit earlier than expected.

She said: “At present if an individual is contracted out the employer and the employee pay national insurance contributions reduced in total by 4.8 per cent. From 2016, when contributions will be payable at the full rate, the chancellor will collect approximately £5.5bn extra in contributions.

“This is against a backdrop of increases to contributions in recent years. By moving the date forward there will be winners but many will be losing sooner than they expected.”

Adviser tweet

Steve Bee @PensionsGuru
With contracting-out going, DB schemes will have problems. With it going earlier they will have problems earlier.