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HMRC internal manual

National Insurance Manual

Earnings of employees and office holders: retirement benefits schemes from 6th April 2006 - Overview

From 6th April 2006, the tax treatment of pension schemes changed. The eight different tax regimes which existed prior to that date was replaced with a single universal regime for tax- privileged pension provision. Under the new regime, “unregistered” pension schemes are allowed to exist but enjoy none of the tax advantages of “registered” pension schemes.

In simple terms, from the above date, there will be, essentially, two types of pension scheme:

  • registered pension scheme (“RPS”); and
  • employer-financed retirement benefits schemes (“EFRBS”).

A RPS is broadly equivalent to an approved pension scheme which existed up to 6th April 2006. Whilst an EFRBS equates broadly to unapproved schemes - whether funded (a funded unapproved retirement benefits scheme (“FURBS”) or unfunded (“UURBS”)).

In addition to a RPS and EFRBS, there is, for NICs purposes only, one other type of pension scheme: an employer-financed pension only scheme (“EFPOS”). More details about this type are at NIM02790 (contents) - NIM02797.

The NICs treatment of payments into, and out of, a RPS and an EFRBS is, to a large extent, based on how such payments are dealt with for income tax purposes (but taking into account the fundamental differences between the income tax and NICs systems). But there are some significant differences in treatment, most notably in relation to payments out of an EFRBS.

For details of

  • the Class 1 NICs position on:




  • the tax position on:



  • a RPS, see the “Registered Pensions Schemes Manual”;
  • an EFRBS and unapproved retirement benefits schemes, see EIM15000 (contents).