Small to big enterprises in the United Kingdom have their employees auto-enrolled in a workplace pension scheme. According to the Pensions Regulator’s report, about six million employees are now enrolled and about 95% of small and micro-employers are compliant with their auto-enrolment staging date.
About 110,000 employers have gone through the entire process of auto-enrolment. However, The Pensions Regulator Representative Charles Counsell says the job is yet to be done especially with plenty of small business going through the same auto-enrolment process.
In the second quarter of 2016, about 21% of UK businesses missed the deadline. Those who were late in taking the first step of registration could be fined up to £5000 or even court action.
The Pensions Regulator recommends that businesses leave 12 months in advance of their auto-enrolment staging date to start the process with most businesses (those with PAYE schemes and up to 30 employees) required to have enrolled staff in a pension scheme by April 1 2017.
Morten Nilsson, CEO of NOW: Pensions, said: “While it’s worrying that 21% are missing their staging date, it’s also reassuring to see that 34% are planning well in advance.
“Small business owners have a lot to think about and it’s easy for auto-enrolment to be put on the back burner but the fines for non-compliance are steep. Missing the deadline can cause unnecessary sleepless nights.”
A rule that would reform an “unfair” cap on the compensation paid out by the pension fund is being delayed by the government because “it does not suit the government’s current agenda.”
According to Baroness Ros Altmann — who had left the Department of Work and Pensions the previous week, said the legislation is ready. However, because it does not suit the government’s current agenda, the legislation can be buried for months.
Currently, the PPF is imposing a liimit on compensation for workers. The PPF considers their age but not the length of their employment. The rules to be reformed were imposed to protect pension payouts for executives paid for by the PPF.
Steve Webb, formerly pensions minister and the architect of the new rules, said “The compensation cap was originally introduced to prevent top executives getting huge payments from the PPF. But it has ended up catching long-serving workers who may have no other pension and who have given their life to the company.
“This was never the original intention and it is right that the cap should be lifted for those who have been in the scheme for many decades. The Government has the power to do this and should now get on with implementing this measure”.
Scamming the elderly for their pensions through fake government identifications and threats isn’t enough for scammers.
With new government pension rules, rip-off frequency may likely increase.
Unfortunately, these scammers may be legitimate pension companies themselves.
The new rules introduced last April 2015 allow those aged 55 and over to have access to their pension pots with their first 25% withdrawals tax-free.
Now, scamming pension companies advise clients to take high-risk investments. Undercover footage even showed unregulated consultants doing the deed.
Lifestyle Connections is now in the limelight after the UK’s Panorama sent an undercover reporter to a call centre for pension consultation and reviews.
The company’s trainers had advised the undercover reporter to lie to the people she is being trained to call and get everyone to invest in certain companies.
A company, Cape Verde, was mentioned multiple times. It is a tourist destination in the northwest coast of Africa.
On further investigation, Lifestyle Connections and its partner, First Review Pension Services, are owned by The Resort Group, which owns resorts in northwest Africa.
We at PensionReviewServices.org.uk work with credible experts and we are not selling investment opportunities to our clients. Instead, we advise our clients based on their lifestyle of choice based on the amount of money they have in their pensions. We definitely condemn this attitude that brings a dark colour to companies similar to use providing similar services.
Do watch out for companies such as these!
The UK might have found itself in a bit of a pickle with the Brexit and everyone feared that pensions – due to stagnant interest rates – would be the most blasted. But the Brexit may possibly be the shining torch the pensions black hole needs if properly done.
Gilt yields dropping in value could mean pension liabilities skyrocketing. The value of pensions can raise up. BoE Governor Mark Carney pointed out that the UK could likely go with an interest cut or quantitative easing. If the latter is introduced, UK’s retirees might have a chance.
Defined benefit pensions are closed to new members. To help handle the possible fall, the government may choose to have higher investment returns or may top-up contributions from employers and employees.
This goes without saying that trustees would demand higher cash funding from companies.
Lady Barbara Judge, the outgoing head of the Pension Protection Fund (PPF), warned yesterday: “Everybody had been hoping that the economy would improve and that interest rates would go up, and the problem would solve itself, but now Brexit has changed the game.”
Pensions minister Ros Altmann has called for companies to put pension top ups ahead of dividend payouts if possible. Official figures from the PPF on the state of final salary schemes at the end of June are due out this week. That should serve as a wake up call to companies and trustees who are facing some tough choices.