Govt U-Turn on new pension rules?
There has been some murmuring recently about whether the government will change it’s mind and cut small business some slack in relation to the new pension rules coming next year.
Very recently the Pensions Minister Steve Webb rebutted this idea when he spoke in the Commons. However, on Friday an article appeared on the Daily Telegraph web site that seems to say the opposite. You can click through to the article here.
I’m not sure that this is as definitive as it sounds and we’ll probably have to wait and see if George Osborne says anything tomorrow.
It doesn’t really make sense only to exempt smaller employers as that will create a very uneven playing field if larger employers still have to comply. After all why take a job with a big employer where you have to pay 4% of your pay into a pension when you can work for a smaller employer and avoid it.
It’s all a bit of a mish-mash. Let’s hope we get some clarity soon as there are some employers who are still sticking their heads in the sand and pinning their hopes on some form of delay.
Watch this space!
Steve Clark
Living Together? Your rights on pensions, inheritance & tax
Despite the increasing trend for people to live together many couples are unaware that if their partner dies they might not get everything they thought they would.
This is especially true in relation to what you get from a pension scheme or your partner’s estate.
It’s quite a minefield for most people to navigate . Don’t worry we’ve found for you a great guide for you to read. This looks at your rights if you’re in this position and gives you some great Top Tips to have a look at. You can click through to the guide here.
It’s a sad fact that many couples take longer to organise a two week holiday than they do to sort out what happens if one of them gets sick or dies.
To help further 44 Financial Ltd offers a comprehensive review service that will help you avoid these pitfalls. We’ll look at all your finances and wishes for the future and give you advice and pointers on things like inheritance, pension benefits. and protection for you and your partner if you are sick or die. We’ll also work with your solicitor if you have one to make sure that everything is done properly.
To arrange a free initial consultation email us here.
And last but not least a big thank you to those nice legal people at DMH Stallard for sending us the guide.
Steve Clark
Is your advisor saving you this much?
One of our main roles as your advisor is making sure that you get excellent value for the money that you spend on benefits. When it comes to our fees and costs nothing’s different. It can be a bit more subjective when we look at the value that we bring. Some of that will depend on the feedback that comes from employees who are members of the arrangements.
A good example is a recent reply to one of our LinkedIn updates that we posted. It was highlighting some research that Standard Life had done. The post basically stated that 72% of over 55s don’t think they can live on £140 a week State Pension. I got a reply from Ian Gray who was a client I advised on his retirement. Ian wrote in reply:
"Thanks to you Steve I do not have to. Many thanks for all your past advice. – Ian Gray"
We have loads more examples from clients of this kind of feedback that demonstrates that we are adding value for clients (and as importantly their employees) in everything we do.
But what about value you can measure?
Great feedback is fantastic and it shows us that we are doing something right. However, it’s hard to quantify in pounds and pence the impact that we have had.
When it comes to looking at the arrangements we look after for clients we can get this kind of quantative feedback. Forgive us for a little bit of self-publicity in looking at a recent case study involving one of our new clients that we have picked up from a national advisory firm. It demonstrates the value of what we do and the benefit of being with a pro-active advisor.
Since taking over we have done a full benefit audit. We’ve checked that everything has been set up correctly and that all of the benefits have been reviewed regularly.
So far (and there is still work to do) we’ve saved the company £25,629! Yes £25,629. This isn’t a large employer – they’ve got just over 30 employees. Here’s how we did it:
|
Description |
Amount Saved |
|
Review of Group Travel Insurance Policy |
£200 |
|
Waiver of Premium Refund Claim – Employer |
£9,787 |
|
Waiver of Premium Refund Claim – Employee |
£4,638 |
|
Review of Medical Care Scheme |
£7,252 |
|
Review of Income Protection Scheme |
£3,752 |
|
Total |
£25,629 |
That works out at a saving of over £95 for each day that we’ve been working for them! A tremendous result for the company in such difficult economic times. We’d like to think we could continue at that rate but sadly it’s not going to happen.
It’s not just about saving money. During our audit we’ve unearthed a Waiver of Premium pension
claim that had never been submitted, a temporary absence clause on the Group Life Scheme that leaves the employer badly exposed and group risk arrangements that we needed to bring into line with the Default Retirement Age "carve out".
All in all, a good few months work. We’ve not only identified and released savings but also identified and mitigated a number of very real business risks.
If your advisor isn’t doing all that for you – isn’t it time you changed. Our example shows that the biggest in our industry aren’t always the best.
To arrange an initial meeting at our expense please contact us here. It may well be the best investment you ever make!
Steve Clark
All images courtesy of Flickr – Images_of_Money, woodleywonderworks. Photos8
European Decision on Sick Leave & Holidays
Well just like London buses the cases on this are coming thick and fast! You can read our last blog posts on this here and here .
A German case was heard by the European Court of Justice on Tuesday this week regarding whether an employee who was off ill could carry forward holidays. This seems now to be the main issue that is unresolved.
Eversheds have produced a piece for their Education HR publication. Although it’s aimed at educational establishments the impact of the case affects all employers.
You can click through to the article here.
The position now seems to be that workers who are on sick leave have a choice: they can take annual leave if they want to, but if they don’t want to they can insist on postponing their annual leave and taking it at a later date. That can even mean taking it in a later holiday year if it’s not possible to take the leave before the current year ends.
I can’t help that thinking that this is one step forward and then two back. As always with this particular issue – watch this space!
Steve Clark
Final Salary Pension Schemes–Some good news?
The Pension Protection Fund is due to bring in a new levy system next year . It’s expected to result in a £50m reduction in levy bills over the next year.
The new system is intended to provide greater stability but will also place a greater emphasis on the funding level and investment risk of the pension scheme.
One of the unfortunate down sides of the new system is that pension schemes with very strong employers which are not especially well funded could see an increase in their levy.
Steve Clark