How will the latest pensions update affect your business? Plus Accounting make it simple
11th March 2013
What are the major changes?
Auto enrolment for workplace pensions begins
Between October 2012 and February 2018 all employers will need to enrol every employee into a workplace pension scheme and make contributions on their behalf. For businesses with less than 250 employees, these changes will not start to become compulsory until April 2014.
Your effective date might be some way off, but getting to grips with the implications now will allow you to plan what is best for your company and your employees.
Flat Rate Pension proposed
Plans to replace the current state pension with a single tier, flat rate pension of £144 per week have been published by the Government.The reform would simplify the current complicated system of basic and additional state pensions and pension credits.
The plans also include increasing the minimum number of National Insurance contribution years needed to qualify for a full state pension from 30 to 35 years.
Maximum Pension Contribution limits to reduce
The annual pension contribution allowance is to be reduced from £50,000 to £40,000 for the 2014/15 tax year. Pension fund contributions made above this limit are subject to tax changes at your marginal tax rate.
Who will be affected?
Those who are likely to benefit from the changes?
- Low earners
- Self employed
Those who may lose out?
- Older women close to retirement age who may struggle to keep up with the increase in qualifying National Insurance Contributions
- Business owners and employees who don’t plan
If you would like to discuss the changes to pensions with a qualified adviser, please contact us.
We have been successfully providing financial guidance to our clients for many years and can recommend qualified financial planners who work closely alongside us to provide advice on tax planning, investments and pensions.
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