The concept of a Workplace Pension Scheme was introduced by the Pensions Act 2008.  All employers in the UK are required to establish a Workplace Pension Scheme on their Staging Date.  On you Staging Date and each subsequent Pay Period you must carry out an Assessment of your employees.  The employer must deduct a contribution from the earnings of all their Eligible Employees and pay this to the scheme along with an employer contribution.   A process called Automatic enrolment.

This is the date from which Employer have to comply with the legislation.  The date is determined by the date the employer established their first PAYE payroll and the number of employees at 6 April 2012.  You can find your Staging Date here.

This is an employee who is aged between 22 and State Pension Age who earn more than £10,000 per annum.

This is an employee who is aged under 22 or over State Pension Age who earns more than £10,000 per annum.  Or any employee who earns between £7,956  and £10,000 per annum.

This is an employee who earns less than £7,956 per annum.

 

This is when after carrying out an Assessment of its employees the employer automatically enrols it employees into their Workplace Pension Scheme.

The first assessment must be carried out on your staging date and every Pay Reference Period thereafter.  Once you have assessed your employees you must automatically enrol all of the Eligible Employees.

 

All employers with one or more employees must comply with the legislation.  However one man limited companies are exempt.

Yes.  All eligible employees must be Automatically enroled.  However they can opt out if they wish.

 

No.  Employers who are seen to encourage opting out may be fined by the Pensions Regulator.

 

If they opt out within one month of being automatically enroled in to the Workplace Pension Scheme.  They must receive a refund of their contributions.  You will have to automatically re-enrol any opters out every three years from your Staging Date.

 

Initially the employer must contribute 1% of Qualifying Earnings and ensure that a total contribution of 2% is paid.  Thereafter contributions will increase as follows:

Minimum EmployerMinimum Total
Up to 30 Sept 20171%2%
1 Oct 2017 to 30 Sept 20182%5%
From 1 Oct 20183%8%

Non-eligible jobholders can opt in to the scheme.  Opters in are be treated as eligible jobholders and will qualify for an employer contribution.

Entitled Workers can also ask to join but do not qualify for an employer contribution.

This is the period over which your employees are paid.  It could be weekly, four weekly or monthly.

The Pensions Regulator is tasked with ensuring that all employers comply with the legislation.  Enforcement action starts with statutory notices and is followed by penalty notices of £400.  Further non compliance may result in court action and fines of between £50 and £10,000 per day depending on the number of employees you have.

For the 2014/15 tax year this means earnings between £5,772 and £41,865 a year.

If you are a UK resident under age 75 you can contribute up to 100% of your earnings (subject to  limit of £40,000) and receive tax relief on the contributions.  The limit is known as the Annual Allowance.  There is also a limit to the size of pension pot you can build up, this is referred to as theLifetime Allowance and is currently £1.25 million.

As an example: If you earn £40,000, you can make a pension contribution of £40,000 gross.  This effectively means you will actually contribute £32,000, with the additional £8,000 being paid by HMRC, as the basic rate tax relief of 20% is added from HMRC.

When you make a pension contribution either monthly or a single premium, the government add 20% basic rate tax relief.

There will be a large range of funds available, which offer you access to funds across all asset classes, ranging from low risk to higher risk areas of the market.  At Corporate Benefits we will build a suitable investment portfolio depending on your circumstances and the level of risk you are comfortable with.

You can take some or all of your pension benefits from age 55, although this age will increase to 57 in 2028.

From age 55 you can take 25% of your Personal Pension as a tax free lump sum.  You also have the option of purchasing an Annuity or an Enhanced Annuity, which will provide you with a guaranteed level of income for the rest of your life.

Alternatively, you can leave your pension fund invested and draw an income (either regular or lump sum) from it.  This is known as Income Drawdown, which offers greater flexibility and benefits to your family in the event of your death.

A Personal Pension not only helps provide for your retirement, but also offers financial protection for your family.

If you die before benefits are taken from the pension, your fund will be paid as a tax free lump sum provided it does not exceed the Lifetime Allowance.

The benefits your family would receive if you die after retirement will depend on the options you choose when you retire.

You may be able to transfer existing pension arrangements.  This is a complex area and you should seek appropriate financial advice before arranging a transfer.

You can invest up to £15,000 in an ISA for the 2014/2015 tax year.

An ISA allows you to invest in a wide range of investments across different asset classes (Equities, Fixed Interest, Property, Cash and Absolute Return).  You can hold different funds from different asset classes and different investment managers within an ISA.

Yes, the minimum monthly contribution is usually £50.

 

Yes, you can transfer existing ISA’s from other companies.  If you transfer an existing ISA to a new ISA this does not count as a contribution within the current tax year’s allowance.

 

 

What is a Workplace Pension Scheme?

The concept of a Workplace Pension Scheme was introduced by the Pensions Act 2008.  All employers in the UK are required to establish a Workplace Pension Scheme on their Staging Date.  On you Staging Date and each subsequent Pay Period you must carry out an Assessment of your employees.  The employer must deduct a contribution from the earnings of all their Eligible Employees and pay this to the scheme along with an employer contribution.   A process called Automatic enrolment.

What is my Staging Date?

This is the date from which Employer have to comply with the legislation.  The date is determined by the date the employer established their first PAYE payroll and the number of employees at 6 April 2012.  You can find your Staging Date here.

What is an Eligible Employee?

This is an employee who is aged between 22 and State Pension Age who earn more than £10,000 per annum.

What is a Non-eligible Employee?

This is an employee who is aged under 22 or over State Pension Age who earn more than £10,000 per annum.  Or any employee who earns between £7,956  and £10,000 per annum.

What is an Entitled Worker?

This is an employee who earns less than £7,956 per annum.

What is Automatic enrolment?

This is when after carrying out an Assessment of its employees the employer automatically enrols it employees into their Workplace Pension Scheme.

When do I have to carry-out an Assessment of my employees?

The first assessment must be carried out on your staging date and every pay reference period thereafter.  Once you have assessed your employees you must automatically enrol all of the Eligible Employees.

What is the minimum number of employees?

All employers with one or more employees must comply with the legislation.  However one man limited companies are exempt.

Do my employees have to join the Workplace Pension Scheme?

Yes.  All eligible employees must be Automatically enroled.  However they can opt out if they wish.

Can I encourage my employees to Opt out?

No.  Employers who are seen to encourage opting out may be fined by the Pensions Regulator.

What happens when an employee Opts out?

If they opt out within one month of being automatically enroled in to the Workplace Pension Scheme.  They must receive a refund of their contributions.  You will have to automatically re-enrol any opters out every three years from your Staging Date.

How much do I have to contribute?

Initially the employer must contribute 1% of Qualifying Earnings and ensure that a total contribution of 2% is paid.  Thereafter contributions will increase as follows:

Minimum EmployerMinimum Total
Up to 30 Sept 20171%2%
1 Oct 2017 to 30 Sept 20182%5%
From 1 Oct 20183%8%

Can Employees Opt in to a Workplace Pension Scheme?

Non-eligible jobholders can opt in to the scheme.  Opters in are be treated as eligible jobholders and will qualify for an employer contribution.

Entitled Workers can also ask to join but do not qualify for an employer contribution.

What is a Pay Reference Period?

This is the period over which your employees are paid.  It could be weekly, four weekly or monthly.

What happens if I ignore the legislation?

The Pensions Regulator is tasked with ensuring that all employers comply with the legislation.  Enforcement action starts with statutory notices and is followed by penalty notices of £400.  Further non compliance may result in court action and fines of between £50 and £10,000 per day depending on the number of employees you have.

What are Qualifying Earnings?

For the 2014/15 tax year this means earnings between £5,772 and £41,865 a year.

 What is a Personal Pension?

It is a tax efficient way for you to put money aside to provide you with income when you decide to stop working.  A Personal Pension is established in your name and you will own the policy, regardless of your employment status.

How much can I contribute to a pension?

If you are a UK resident under age 75 you can contribute up to 100% of your earnings (subject to  limit of £40,000) and receive tax relief on the contributions.  The limit is known as the Annual Allowance.  There is also a limit to the size of pension pot you can build up, this is referred to as the Lifetime Allowance and is currently £1.25 million.

As an example: If you earn £40,000, you can make a pension contribution of £40,000 gross.  This effectively means you will actually contribute £32,000, with the additional £8,000 being paid by HMRC, as the basic rate tax relief of 20% is added from HMRC.

When you make a pension contribution either monthly or a single premium, the government add 20% basic rate tax relief.

What investment options are available?

There will be a large range of funds available, which offer you access to funds across all asset classes, ranging from low risk to higher risk areas of the market.  At Corporate Benefits we will build a suitable investment portfolio depending on your circumstances and the level of risk you are comfortable with.

When can I retire? 

You can take some or all of your pension benefits from age 55, although this age will increase to 57 in 2028.

What options do I have when I retire?

From age 55 you can take 25% of your Personal Pension as a tax free lump sum.  You also have the option of purchasing an Annuity or an Enhanced Annuity, which will provide you with a guaranteed level of income for the rest of your life.

Alternatively, you can leave your pension fund invested and draw an income (either regular or lump sum) from it.  This is known as Income Drawdown, which offers greater flexibility and benefits to your family in the event of your death.

Is my family protected if I die before I retire?

A Personal Pension not only helps provide for your retirement, but also offers financial protection for your family.

If you die before benefits are taken from the pension, your fund will be paid as a tax free lump sum provided it does not exceed the Lifetime Allowance.

What happens if I die after I retire?

The benefits your family would receive if you die after retirement will depend on the options you choose when you retire.

Can I transfer existing pensions?

You may be able to transfer existing pension arrangements.  This is a complex area and you should seek appropriate financial advice before arranging a transfer.

What if I have questions about my State Pension?

For queries relating to your State Pension benefits, you can contact The Pensions Service www.dwp.gov.uk/contact-pension-service.

ISA

What is the maximum I can invest?

You can invest up to £15,000 in an ISA for the 2014/2015 tax year.

What investment options are available?

An ISA allows you to invest in a wide range of investments across different asset classes (Equities, Fixed Interest, Property, Cash and Absolute Return).  You can hold different funds from different asset classes and different investment managers within an ISA.

Can I invest monthly?

Yes, the minimum monthly contribution is £50.

Can I transfer existing ISA's?

Yes, you can transfer existing ISA's from other companies.  If you transfer an existing ISA to a new ISA this does not count as a contribution within the current tax year's allowance.