Nicholls Stevens Financial Services

PERSONAL ACCOUNTS AND THE EMPLOYER

The planned introduction of Personal Accounts is April 2012

What does this mean for employers ?

1                     If you do not already offer access to a pension scheme to your employees which is equivalent to Personal Accounts you will be obliged to contribute to Personal Accounts for all your employees

2                     Employers will contribute 3% of earnings between an earnings threshold £5, 225 - £34,840 (2207/8 figures) for all employees unless the employee opts out

3                     All employees between age 22 and state retirement age will be automatically enrolled and must make a positive decision to opt out

4                     Employees will be required to pay 4% of pay between the earnings shown above

5                     The Government will contribute 1% tax relief

6                     The scheme will run on a money purchase basis and pension benefits can be taken from age 55

7                     A tax free sum of 25% of the fund will be available

8                     The contribution for employers will be phased in over 3 years, starting at 1% of the band earning in 2012

What should you be doing in preparation ?

1                     You should be reviewing any existing pension arrangements you have in place

2                     Decide whether you are going to extend these existing arrangements to all employees

3                     Decide whether you will want to take part in the Government Scheme or introduce your own

Taking advice

If you want to review your current provision for employees please get in touch