Autumn statement analysis
Download as PPTX, PDF1 like287 views
The document summarizes the key impacts of the UK government's Autumn Statement on auto-enrollment pensions. It notes that the auto-enrollment phasing timetable has been extended, which is good for employers' cashflow but bad for committed savers. Tax changes related to national insurance contributions and income tax thresholds will impact payroll. Additional changes were announced around LGPS governance, the secondary annuity market, inheritance tax on drawdown pensions, and scheme pension death benefits. The document directs readers to listed websites and Henry Tapper's contact information for further details on pensions and the Autumn Statement.
Autumn statement analysis
- 1. The Autumn Statement What it means for auto-enrolment. Full notes available at www.henrytapper.com Henry Tapper Director First Actuarial Founder Pension PlayPen
- 2. Agenda- The impact of the spending review In the next ten minutes I will try to answer Andy’s questions! • What are the repercussions of the spending review on the AE market? • Have there been any changes in pension taxation? • Any developments in the PISA initiative?
- 3. Key change Auto-enrolment phasing timetable Good for - HMRC- £840m (£390m+ £450m) - Numbers assume 28% opt-outs! - Employer’s cashflow - Employee’s cashflow Bad for - The committed saver – (£770 down) - The providers and their financials - Employers who’ll see higher fees - The future of EET (April Budget) This change cannot be seen as good for auto-enrolment But it could have been worse!
- 4. Better news overall • Tax-credit u-turn averts opt-out fiasco. • Stamp Duty hike on “Buy-to-let” keeps money in pensions
- 5. Further changes to pensions • LGPS governance brought in line with occupational schemes • Secondary annuity market still in scope • IHT threat to drawdown withdrawn • Changes to scheme pension death benefits
- 6. Tax changes impacting payroll • National insurance – more will pay it and most will pay more of it! • The weekly Lower Earnings Limit remains at £112 • The Upper Earnings Limit increases to £827 • Income tax – the gap between the AE threshold widens • Nil rate band is now 0-£11,000 pa • Basic rate band is £11,000-£43,000 • 40% band is £43,000 to £150,000 All changes apply from 6th April 2016
- 7. Threats
- 8. For more information First Actuarial - www.firstactuarial.co.uk Pension PlayPen - www.pensionplaypen.com Henry Tapper - www.henrytapper.com Henry.h.tapper@firstactuarial.co.uk @henryhtapper 07785 377768
Editor's Notes
- #2: No one ever said that Payroll would need to become expert at pensions. Pensions are complicated and choosing a pension for your staff is an activity that should, according to the Regulator, be conducted only with “skill and knowledge”. The Office of Fair Trading concluded that SMEs and Micros do not have this skill and knowledge; when it came to workplace pensions they said they had seldom encountered such weak purchasers. So employers need help in choosing pensions but they are not getting it. In this presentation I will explain why payroll software providers and the agents that use it are being called upon to provide advice on pensions and particularly who the employer should use as the qualifying workplace pension provider. I will explain the risks to payroll in assuming this function and how these risks can be outsourced to a trusted third party. Pension PlayPen is a digital service that allows employers to choose the pension that is right for them and to have that decision documented for posterity. It is available to software providers at a price of £99 per usage which can be borne within the pricing of the module or charged directly to the customer.