Archive for the ‘Workplace Pension’ Category

Don’t get caught out with Auto Enrolment

Wednesday, March 9th, 2016

Up to 500,000 small and micro employers are due to stage in 2016, with 87,000 filing Declarations of Compliance in January 2016.

The Pension Regulator has issued nearly fifteen hundred £400 fines, during the period October to December 2015. The Regulator has issued the following statement:

“Our research shows that most employers want to do the right thing by their staff but that smaller employers are more likely to leave things to the last minute. They therefore need a “nudge” to encourage them to meet their duties.

A minority still don’t comply after receiving a notice of non-compliance, but many do after receiving a fixed penalty of £400. As we deal with smaller employers, it is expected there will be more who, despite the message to prepare early, leave it too late or don’t act at all. We take this very seriously….”

The Regulator tells us that one of the main reasons for failure to comply is that employers felt that their advisor (us the Accountants) should have known to complete the information on their behalf.

Don’t get caught out…

This is one of the reasons why we have teamed up with local pensions specialists Richard Jacobs to hold a number of Auto Enrolment workshops that aim to introduce Auto Enrolment to local employers.

Click here to learn more and to book onto our next workshop on the 17th March

 

 

 

Workplace Pensions and Auto Enrolment

Monday, February 1st, 2016

A workplace pension is a way of saving for your retirement that’s arranged by your employer.

Up until recently not all employers had to offer ‘work place pensions’, however the law on workplace pensions has changed and every employer with at least one member of staff now has new duties; they must automatically enrol workers into a workplace pension scheme and contribute to it if they meet the following criteria:

  • are aged between 22 and State Pension age
  • earn more than £10,000 a year
  • work in the UK

This is called ‘automatic enrolment’.

It’s called ‘automatic enrolment’ because it is automatic for staff – they don’t have to do anything to be enrolled into a pension scheme, but it is not automatic for employers.

Click here for some:Auto Enrolment Key Facts

Does automatic enrolment apply to you?

All employers will need to work out if automatic enrolment applies to them. However if you are an employer and have at least one member of staff who is paid via a PAYE scheme, then yes automatic enrolment duties apply to you.

What is Auto Enrolment?

You will now have to set up and offer a workplace pension to your employees. However do not panic if you haven’t already done this, you may not need to just yet.

When this law was introduced the Pensions Regulator rolled it out using a phased approached, called Staging Dates.

An employer’s staging date is determined by the number of people in the largest PAYE scheme that they use, based on the data from HM Revenue and Customs held by them on 1 April 2012.

How do you check your staging date?

The Pensions Regulator offer a staging date calculator to check  All you will need is your PAYE reference.

Click here for some additional information on the stages of setting up:Auo Enrolment

Getting the help that you need.

As Accountants it is our role to support and inform our clients about Auto Enrolment. As there is also an implication on any payroll services, where applicable we are also obligated to offer support in this area.
Jacobs Logo

To support our clients with understanding the options for them, we have teamed up with local pension and investment specialists Richard Jacobs, and have worked together to offer a short workshops on the topic.

To learn more about Auto Enrolment here are some Key Facts

 

We want to extend our support to other businesses in and around our area by inviting any employers who have not yet set up their workplace pensions along to one of our workshops.

Our workshop is designed to:

  • Provide you with an overview of what you need to know about Auto Enrolment and covers:
    • What is it.
    • Why you need to do it
    • How much it will cost you.
    • Which pension schemes are available.
  • Give you an overview of how Auto Enrolment will impact you from a payroll perspective
  • Give you an opportunity to discuss your requirements in more detail

 

Book your place

 

 

 

 

This short workshop is purely to offer and advice and make you aware of what you need to know. Whilst there will be opportunity to discuss your business at the workshop with both the Slaters and Jacobs teams, a full detailed discussion would need to take place individually.
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References:

https://www.gov.uk/workplace-pensions/about-workplace-pensions

https://www.thepensionsregulator.gov.uk/automatic-enrolment-guide-for-business-advisers.aspx.

Work Place Pensions and Auto Enrolment

Thursday, November 5th, 2015

The Department of Work and Pensions and the Pensions Regulator have launched a new advertising campaign promoting auto enrolment which aims to change the country’s perception of pensions in the workplace.

Workie, ‘a striking physical embodiment of the workplace pension’, will be seen visiting people in different work environments over the coming months, asking them not to ignore him.

The advertisements come with a message, whilst automatic enrolment into workplace pensions has been rolling out across the UK since 2012, it is only now that 1.8 million small and micro employers need to act. In a phased process over the next three years, every employer will have to enrol their eligible staff into a pension scheme, by reference to their staging date.

Pensions Minister, Baroness Altmann, said:

‘We have made great strides forward by automatically enrolling more than 5 million people into a workplace pension – now the challenge is to make sure hardworking people with every type of employer get to enjoy this major financial benefit.

This is a fun and quirky campaign but behind it lies a very serious message. We need everyone to know they are entitled to a workplace pension – and we need all employers to understand their legal responsibility to their staff, but also to feel more positive about engaging with workplace pensions.

This government is committed to providing security for working people at every stage of their lives, and that includes giving people the chance to plan for a financially secure retirement. Automatic enrolment is a big part of that.

Since 2012, more than 5.4 million workers have been automatically enrolled into a workplace pension by almost 61,000 employers. By the time the process is complete in 2018, it is estimated that around 9 million workers will either be newly saving or saving more into a workplace pension thanks to the policy.

The new campaign will include radio, print, online and outdoor advertising and will run for the remainder of this year and into 2016. It is being coordinated jointly by the Department for Work and Pensions and The Pensions Regulator.’

 

Getting you ready for Auto Enrolment

Slaters have teamed up with local pension and investment specialists Richard Jacobs to offer Slaters clients more information on Auto Enrolment.

Our next workshop on Auto Enrolment will be in February 2016*.

The workshop will start at 9.00am until approx. 11.30am, and is designed to :

  • Provide you with all you need to know about Auto Enrolment
  • Take you through 9 easy steps to get you prepared
  • Give you an opportunity to discuss your requirements in more detail

Click here to register your interest

Pension Schemes for Auto Enrolment

Monday, August 24th, 2015

The Pensions Regulator (TPR) has published some guidance aimed at the 1.3 million small and micro employers who are preparing for pensions auto enrolment. The guidance aims to help employers find a good quality pension scheme. TPR research suggests one in five (290,000) employers will not seek advice when choosing a pension scheme, while one in ten (130,000) do not know how to select a scheme, or think it will be difficult.

The information includes details of a list of ‘master trust’ pension schemes open to employers of all sizes, and which have been independently reviewed to help to demonstrate that they are administered to a high standard.

TPR have also made available a quick guide for small and micro employers on what to look out for when choosing a scheme suited to their needs. They have also updated their webpage guidance to advisors.

Lesley Titcomb, chief executive of The Pensions Regulator, said:

‘I strongly believe that the vast majority of the 1.3 million small and micro employers approaching automatic enrolment want to do the right thing. However, many will choose not to seek advice and will need additional support to meet their duties.

We are committed to providing them with the information they need to make confident choices when it comes to choosing a quality scheme for their employees.’

If you would like help complying with your auto enrolment duties please do get in touch.

Internet link: Press release

Auto Enrolment guidance for small employers

Tuesday, April 7th, 2015

The Pensions Regulator (TPR) has launched a new step-by-step guide to help small businesses get ready for their automatic enrolment duties.

According to TPR the online guide has been written specifically for employers with between one and 50 staff.

The guide which is broken down into 11 steps, considers the legal requirements and what employers need to do to comply with their obligations.

Executive director for automatic enrolment Charles Counsell said:

‘We are determined to do all we can to reach out to all small and micro businesses preparing for their automatic enrolment duties. We want to make the process as simple as possible so that employers can avoid the risk of non compliance.’

‘Our new online 11-step guide is a key part of a wide package of measures we are rolling out to give more than a million employers all the information they need, written and produced in a way they makes sense to them.’

‘Our message to employers is ensure you know when your automatic enrolment duties begin and start planning in good time. The regulator’s website should be the first port of call for all employers and their advisers as it offers essential information about each task an employer will need to accomplish in order to comply and avoid penalties.’

Click here to view the step-by-step guide

If you would like help with Auto Enrolment please do get in touch.

 

Pension freedoms to be extended to annuitants

Monday, March 23rd, 2015

The Chancellor has announced that the government will extend its pension freedoms to around 5 million people who have already bought an annuity.

From April 2016, the government will remove the restrictions on buying and selling existing annuities to allow pensioners to sell the income they receive from their annuity without unwinding the original annuity contract.

Pensioners will then have the freedom to use that capital as they want – just as those who reach retirement with a pension pot can do under the pension freedoms announced in Budget 2014. They can either take it as a lump sum, or place it into drawdown to use the proceeds more gradually.

The new flexibilities build on the radical reforms announced in last year’s Budget, and due to come into effect on 6 April, which allow people to make their own, informed choice about what they do with their savings in retirement. This could include being able to draw down from their defined contribution pension pots a bit at a time or taking their pension as a lump sum.

Chancellor of the Exchequer George Osborne has said:

“There are 5 million pensioners who are locked into annuities they have already bought. They should have the same freedoms as we have given everyone else.

For most people, sticking with that annuity is the right thing to do. But there will be some who would welcome being able to draw on that money as they choose – the same freedom we are offering those approaching retirement in April this year.

So I am going to change the law to let that happen, and make sure we have the right guidance in place.

People who’ve worked hard and saved hard all their lives should be trusted with their own pension.”

Currently people wanting to sell their annuity income to a willing buyer face a 55% tax charge, or up to 70% in some cases. The government will remove this charge, so people are taxed only at their marginal rate.

To ensure people are in a position to make an informed decision, the government will be working with the Financial Conduct Authority (FCA) to introduce appropriate guidance and other consumer protection measures.

For the great majority of customers, selling an annuity will not be the right decision. However individuals may want to sell an annuity for instance to provide a lump sum for relatives or dependants; pay off debts; in response to a change in circumstances for example getting divorced or remarried; or to purchase a more flexible pension income product instead.

On Wednesday, 18 March, the government will launch a consultation on the measures that are needed to establish a market to sell and buy annuities.

Fines for non compliance with Pension Auto Enrolment

Tuesday, March 10th, 2015

Fines for those who fail to comply with Pensions Auto Enrolment

The Pensions Regulator (TPR) has issued 166 Fixed Penalty Notices of £400 to employers who failed to meet their obligations in the last quarter of 2014.

The number of employers approaching the date when they must confirm that they have complied with new workplace pensions duties (known as a declaration of compliance) is now beginning to rise significantly as Auto enrolment is rolled out across all employers. In future months, TPR expects to see more employers who, despite the message to prepare early, leave it too late or do not comply at all.

The Pensions Regulator’s Director of automatic enrolment, Charles Counsell, said,

‘My message to all employers is that failing to declare within five months of your staging date means you risk being fined, which is why we recommend you start your automatic enrolment planning and preparation 12 months before staging.

It appears some medium employers waited for a prompt from the regulator before completing their automatic enrolment duties. Employers must complete all their duties including making their declaration of compliance to The Pensions Regulator.’

Experience to date also shows that employers should begin gathering the information they need to complete their declaration of compliance well in advance of their deadline.

If you would like help or advice with auto enrolment please get in touch.

Pension changes from next month and year end planning

Friday, March 6th, 2015

There are a number of changes to the taxation of pensions from next month. We have copied into this article postings to the GOV.UK website regarding some of the more significant options available from April 2015.

What happens to your pension when you die?

Instead of paying the 55% rate of tax when passing on their pension, people who die under 75 with defined contribution pensions can from April 2015 pass on their unused pension as a lump sum to a person of their choice tax free.

At the Autumn Statement 2014, the Chancellor also announced that from April 2015 payments from certain kinds of annuities that pay out income after you die (joint life and guaranteed annuities) will be tax-free when paid to a beneficiary, if the original policyholder dies below age 75.

For people who die over the age of 75 with unspent defined contribution pensions, they can pass this on to a person of their choice who will be able to take it as a lump sum taxed at 45% or as income and pay their normal rate of income tax.

Withdrawals from your pension

From April 2015, no matter how much you decide to take out from a defined contribution pension after retirement, withdrawals from your pension will be treated as income; the amount of tax you will pay on what you withdraw will depend on the amount of other income you have in that year, as long as you are 55 or over. . This is instead of being taxed 55% for full withdrawal, as it has been previously.

Most people will still be able to access 25% of their pot in one go without paying any tax.

When can you take advantage of the new pension withdrawals?

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then, subject to your pension scheme rules.

If you’re younger than 55 then you will be able to take advantage of the new system when you reach normal minimum pension age under the tax rules (this is currently age 55).

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then, subject to your pension scheme rules.

If you’re younger than 55 then you will be able to take advantage of the new system when you reach normal minimum pension age under the tax rules (this is currently age 55).

Before making any decisions on your pension pot you should take proper advice.

Pension providers or schemes will be required to tell people about the guidance service in the information they send to people when they are approaching retirement. This guidance will be available through a number of different channels – via the internet, over the phone, or face to face at a Citizens Advice Bureau.

It will be entirely impartial, so won’t be given by anyone who could be trying to sell you a product.

Year End Pension Planning

Take advantage of the pension carry forward rules in order to benefit from any unused allowances from the previous three tax years.  This is generally the difference between the old £50,000 limit and the pension input each year and can be added to your relief for 2014/15.  Note that the annual pension allowance is £40,000 from 6 April 2015.
For example if your pension input was £20,000 in  the 2011/12 tax year, then there is potentially up to £30,000 unused relief from that year available to add to your £40,000 2014/15 pension allowance. You would need to make gross pension contributions of at least £70,000 (£40,000 plus £30,000) to avoid losing this generous relief.

Domestic employment arrangements

Monday, March 2nd, 2015

Did you know that if you take on domestic help you may be considered an employer?

Anyone who works in a private home is treated as an employee if they only work for one family, except for au pairs. This includes nannies, housekeepers, gardeners and anyone else working for one family. You’re their employer if you hire them.

As an employer you would need to ensure that an employee:

  • has an employment contract
  • is given payslips
  • does not work more than the maximum hours allowed per week
  • be paid at least the National Minimum Wage

They’re also entitled to employment-related benefits, if they meet the eligibility requirements. These include:

  • statutory maternity pay
  • statutory sick pay
  • paid holiday
  • redundancy pay

Additionally, domestic employers must:

  • check if the person can work in the UK
  • have employer’s liability insurance
  • register as an employer and send employer tax returns each year – even if they pay the employee in cash

Running a home with staff is the equivalent of running a business with staff, there are a multitude of legal matters you will need to consider. 

New rules to safeguard value for money in workplace pensions

Thursday, February 12th, 2015

From April, people automatically enrolled into a workplace pension will see their charges capped at 0.75%, unless they have chosen a more expensive option. The details are set out in draft regulations laid before Parliament on 4 February 2015.

For an average earner currently paying into a fund with a charge of 1.5%, this new cap could save them around £100,000 over the course of their working life. Over the next decade, the default fund charge cap will transfer around £200 million from the pensions industry to savers.

Minister for Pensions Steve Webb said:

Today is an excellent day for pension savers. It is vital that workplace pension schemes are run in the interests of their members and that their hard-earned savings are not eaten away by excessive charges.

Over 5 million people have now been automatically enrolled into a workplace pension and by 2018 millions more will be saving for the first time, or saving more. This is why we are building a pensions system that these workers can save into with confidence – and not see their money disappear in opaque charging structures.

There is an understandable buzz around what April will bring for those retiring now, with the unprecedented pension freedoms coming in. But these reforms show we are also determined to help the pensioners of tomorrow – people working hard and saving hard for their families’ future.

The next stage of the government’s work to ensure full disclosure of costs and charges throughout the value chain is also set out in the February paper – with the plan to publish a joint call for evidence with the Financial Conduct Authority in spring 2015.

Most of the updated draft regulations will come in to force on 6 April 2015, subject to Parliamentary approval.