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National Insurance Contributions Act 2008

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4.In his 2007 Budget Statement, made on 21 March 2007, the Chancellor of the Exchequer announced a package of changes to the tax and benefits systems. This Act takes forward the National Insurance aspects of that package by enabling the upper earnings limit for Class 1 National Insurance contribution to be aligned, by secondary legislation, with the level of earnings at which higher rate income tax becomes payable. [House of Commons Hansard, 21 March 2007, Vol 458, Column 827]

5.In his 2007 Pre Budget Report Statement, made on 9 October 2007, the Chancellor of the Exchequer announced that to ensure that proposed changes to the state second pension occur as originally intended, following the alignment of the upper earnings limit with the higher rate income tax threshold, the start date for flat rating state second pension would be brought forward to April 2009. [House of Commons Hansard, 9 October 2007, Vol 464, column 174]

6.This is a short Act. It contains two substantive measures:­

  • The removal of the restriction on exercise of the delegated power to set the upper earnings limit for National Insurance contributions, in order to allow that limit to be aligned with the point at which higher rate income tax becomes payable in the future; and

  • The early introduction of the upper accrual point for state second pension that was included in the Pensions Act 2007, from 6 April 2009.

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