Silver inflation is on the up
Rising costs of fuel and food have greater impact on the elderly and the young.
So the imminent rise in inflation – partly the result of the decline in the value of the pound – means pensioners will see their cost of living rise faster than others.
Alliance Trust calculates that the ‘silver’ inflation rate for people over 75 is now 3.2% against the 2.8% rate for under-30s, who benefit more from falling prices for gadgets and clothes.
Age UK do a similar index and the level of inflation is above that recorded by the Retail Price Index or Consumer Price Index. That’s a really important point for those in receipt of an index linked pension to note.
You actual rate of inflation is likely to be higher than any index that your pension is pegged to.
Steve Clark
Chaos warning over real-time PAYE
The Sunday Telegraph has warned that businesses face a nightmare of red tape following the introduction of Real Time Information for PAYE.
Though the scheme will not apply to smaller companies until the autumn, tax experts believe the complex system required to handle real-time data for employers will result in chaos.
The Sunday Telegraph claimed that many employees in receipt of benefits would have any Christmas bonus clawed back by reductions in tax credits or benefits in the same pay packet.
Up to a quarter of smaller firms are not even aware of the introduction of the scheme.
Steve Clark
Changes to auto-enrolment rules?
The Government is consulting on changes to the auto-enrolment regulations.
Fear not, there are no big changes. The Government is just responding to
issues identified in feedback received since some of the largest employers began enrolling employees last year.
The changes include
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Making it easier for employers to use existing payroll processes to determine whether workers need to be auto-enrolled and for assessing whether existing schemes are qualifying schemes.
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Turning off the employer duty to auto-enrol where a worker has recently opted out of pension saving before they were automatically enrolled (e.g. where an employer makes joining the pension scheme a condition of the contract of employment).
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Confirming that opt-out notices need not be identical to the form specified in regulations.
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Extending the joining window deadline from one month to six weeks.
The Government is looking to make these changes in April 2014. As always…….watch this space.
Steve Clark
The wealthy young give more to charity than their older peers
According to NPC’s Money for Good Report, young, high-income workers tend to give more to charity than their older 
peers.
Those on a high income (which is based on a household income of £150,000 plus) and aged 18-34 give £2,301 on average every year. This is significantly more than the average high income donation of £1,282. High income donors make up 1% of the UK population but contribute 10% of its charitable donations.
As the voluntary sector comes increasingly under pressure, with falling income and growing demand for services, the report shines a light on who gives to charity and why.
The report has found that charities currently under-perform in the areas donors care most about. Donors would like more of an explanation on how donations are used and evidence of its impact. The report revealed that people would give more if the charity provided information on how their donation was used.
Ipsos MORI (a leading research company) surveyed 861 high income donors. Within that group it was found:
- Male high income donors give more to charity than female ones, giving on average £1,417 a year compared to £979 for women – although this may reflect individual income within the household.
- Sponsorship is the most used method of donation,
- There is a stronger preference for direct debits than amongst mainstream donors.
- 43% had also given time as a volunteer in the last year.
- The three most popular causes are medical research (59%), children and young people (46%), and hospital and hospices (44%).
- 24% give to schools, colleges, universities and other education.
Money for Good is the biggest ever UK study of donor motivation. Its aim is to increase the quantity and quality of giving, helping charities to appeal more to the giving public. It identifies different types of UK donor, each distinguished by their particular giving habits, for example Good Citizen – ‘I give because it’s the right thing to do.’ Within these types, the largest group of high income donors is the Ad Hoc Givers (31%) who donate because they are asked to do so, for example, at an event or via sponsorship.
Comment
Don’t forget as well as the philanthropic effect of giving to charity it does have other benefits. For those looking to reduce their income to avoid losing Child Benefit charitable giving is a great way to bring your income back under the £50,000 threshold.
Even if you are not doing it for Child Benefit charitable giving extends your basic rate tax band by the gross amount you give to the charity. So, in other words, it could save you some income tax.
Automatic Enrolment Earnings Triggers
In case you didn’t see it amongst all the furore about Boris Johnson’s interview with my old school mate Eddie Mair; the Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band)Order 2013 – SI 2013/667, was recently laid before Parliament. This comes into force on 6 April 2013.
The earnings thresholds for 2013/14 are as follows:
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Automatic enrolment eligibility earnings trigger £9,440
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Lower qualifying earnings band limit £5,668
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Upper qualifying earnings band limit £41,450
We’ll be discussing these with 44 Financial clients (if they impact on you at our next pension reform meeting. If you are not already one of our clients and all this is news to you – give us a call on 0116 260 5443 to book an initial consultation at our cost.
If, on the other hand, you want to see Boris Johnson squirm see the BBC interview here.
Steve Clark