Q. I am the HR Manager of a well-known North-East employer. I am responsible for ensuring our compliance with the auto-enrolment / workplace pensions regime and I read with interest therefore your answer to a recent question regarding an expected “capacity crunch” amongst pension providers. I recently approached a pension adviser to source a suitable scheme for us, however, he was unable to identify such a scheme / provider who was willing to accept our business as he alleged that we had “left it too late”. Our staging date is not until 1 November and therefore the reason given does not appear to be credible. Can you offer any assistance?
A. First, it is possible that the adviser from whom you sought assistance has experienced difficulties in identifying an insurer/provider that would be willing to assist you in complying with your statutory obligations under the auto enrolment regime.
A number of insurers have strict criteria in terms of the advance notice you must provide them if they are to offer you support in communicating with employees and producing an audit trail so that you can demonstrate – to the Pensions Regulator – that you have done everything that is required of you. It is not uncommon for insurers to require accurate employee data at least six months before your staging date.
However, that said, even if an insurer is unwilling to offer assistance in recording and demonstrating your compliance with your statutory obligations under the auto enrolment regime, they may (depending upon the profile of your workforce) be able to provide a group pension scheme that is suitable for auto enrolment purposes (but without the technical/compliance support). In those circumstances, you would be required to produce the communications to members, opt-out letters, calculate who is entitled to a refund of contributions, keep track of re-enrolment dates and generally ensure your compliance with the statutory requirements (or instruct a financial adviser, who specialises in corporate pensions, to provide that support for you).
I cannot stress enough therefore the importance of beginning the planning process in sufficient time to ensure that all options are available to you and that you meet your statutory obligations at your staging date. I recommend therefore that you consult a chartered financial planner, who specialises in workplace pensions, as a matter of urgency (a process which ought, ideally, to have commenced at least 9-12 months before your staging date). Whilst not all options will remain open to you, a specialist workplace pension adviser ought to be able to assist you in identifying the most appropriate solution still available to you.
Q. I am a higher rate tax payer and earn approximately £60,000 per year. A colleague suggested to me recently that the government are set to re-introduce the 50p tax rate but for those individuals earning just £50,000 and over. Is this correct?
A. No. I suspect that your colleague has confused two news stories that have come out of the current political party conference season.
First, the Lib Dems held a vote earlier this week at their conference proposing to re-introduce the 50p tax rate for those earning more than £150,000. However, that proposal was not carried, the delegates voting against the re-introduction of the 50p tax rate by just four votes (the issue having been too close to call on a show of hands). Many senior Lib Dems have argued that the introduction of a “mansion tax” would be a fairer and more “economically practical and rational” means of raising additional tax revenue.
Secondly, the Lib Dems issued a briefing memo to journalists – intended for ministers’ eyes only – that stated “we are looking at how those earning over £50,000 could make a further contributions…these are not middle income earners”. However the party has subsequently clarified that this does not form a new policy or part of the Lib Dems tax plans and therefore is likely to form part of their manifesto at the next election.
Q. I heard on the radio this week that the government is set to sell off some of its stake in Lloyds Banking Group. I purchased shares in a number of former nationalised utilities in the 1980s and I would like to purchase Lloyds shares when it is privatised. Will I be afforded this opportunity and, if so, when?
A. You are correct that the government announced earlier this week – five years to the day since Lloyds’ rescue of HBOS – its intention to dispose of 6% of the shares in Lloyds Banking Group (representing approximately one sixth of the government’s stake in Lloyds). The sale has been seen by many as good indication of the UK economy’s return to health.
However, the sale of 27.6 million shares, which was announced to the stock market on Monday, was to institutional investors only and has already been completed. The shares were sold for 75p per share and it is estimated that the government has raised approximately £3.3 billion as a result (representing a modest profit of circa £60 million).
It is anticipated that the government will consider a second sale in the early part of 2014, with a view to disposing of its entire shareholding before the next election (due to be held by 2015). Most people expect that this second sale will, at least in part, involve offering shares to UK taxpayers.
If you have a question you would like Trevor to answer, please email it to: yourmoney@rwpfg.co.uk or post it to Your Money, Rutherford Wilkinson Ltd, Northumbria House, 21-23 Brenkley Way, Blezard Business Park, Newcastle upon Tyne, NE13 6DS.
0191 217 3340
