Rather than concentrate on any particular point this month I’ve set out a few things that have happened in the pensions world in the last month or so.
First, after five years of PAYE references and counting employees as at April 2012, we are finally at the end of the auto-enrolment staging mechanic. All employers of UK Workers now have to have an auto-enrolment compliant scheme and that applies to micro-employers (basically people employing nannies, personal assistants etc) and also to newly set up companies.
That’s not the end of auto-enrolment either. Now we move on to the phased increases in contributions and attempts to bring low paid and self employed people within the net of low value pension saving that impacts negatively on entitlements to means tested benefits.
Just as a reminder April 2018 is the date we move from minimum contributions of 1% from both employee and employer and on to 2% for employers and 3% for employees.
More on this to come.
Next we have the Budget coming up. We’ve had a quiet few years on pensions, the last big announcement being the pensions freedoms provisions which are still in the ‘not sure how that will pan out in 10 years box’ for most people.
However we do have a lot of buzz in the press about potential changes to tax relief with a variety of numbers bandied about for how much the current system costs. Some of the recent examples include ‘enough to close the entire Government funding deficit’ and ‘enough to reduce the basic rate of tax to 10p in the Pound.’
As that’s a lot of money and the softening up process has begun it seems quite possible we’ll end up with a new and clunky fixed rate tax relief on pension contributions to save money now in return for lower tax takes later (pensions being taxable once taken except the tax free lump sum which may also be in the headlights…)
We’ve also had a rather techy Court of Appeal case in Safeway this relates to gender equalisation of pension ages in a private sector scheme. Big money involved for the employer – around £100m, but unlikely to be of general interest. Therefore I’ll follow up on that in a separate post that will start by saying who you’d have to be to find this case interesting!