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New call to review legacy pension policies


Much of the recent media attention surrounding pensions has centred around the income flexibility now available to retirees when accessing their pension pots from April this year. While this is great news for many, there have also been changes by the Government around pension death benefits and with these now in effect, we are urging people to contact us to ensure their beneficiaries receive the legacy in the most tax-efficient way.
As of 6 April 2015, the 55% ‘death tax’ for those who die before the age of 75 has been scrapped. This now means an individual’s full pension fund, up to the value of their personal lifetime allowance, can now be passed to a nominated beneficiary when they die as either a tax-free lump sum or a tax-free income.
With these new rules in effect, it is important that people review their pensions and are aware of how these changes will affect the ones they leave behind, should they die.
John Freeman, the Newby Castleman in-house Financial Consultant, comments: “We are urging people to get in touch todiscuss any queries they may have in light of the recent changes we’ve seen to pension death benefits.
Although the recent changes mean greater freedom for people wishing to access their pension savings from 55 onwards, it is still important they understand the facts, particularly in light of the new rules now in place and the fact that existing policies may not accommodate the new way in which
pensions can be passed on to future generations.”
Market research* has shown that since the pension reforms came into effect, nearly one-third of investors wanted to hold on to their pension money as a tax-efficient way to pass funds on after their death, and nearly two-thirds plan to draw money out of their pension when they stop working.
With many pension providers and policies not offering the new death benefit flexibility, this means that future generations will not be able to use the new pension freedom rules and for some, the only way to access the money may be through buying an annuity.
Thanks to the new reforms, pensions now represent one of the most tax-efficient ways of passing on wealth to the future generations while also providing greater choice for beneficiaries on how the money can be used.
John concludes: “Although the Government has set up a new guidance service for those approaching retirement, we still recommend they contact us to get the appropriate support and information which will ensure that individuals are taking full advantage of the most radical pension reforms we’ve seen for over one hundred years.”
Anyone requiring independent financial advice can contact John Freeman on 0116 254 9262 or email jdf@newbyc.co.uk
* Any reference to tax is based on an understanding of current tax legislation which may change in the future

National Living Wage

National Living Wage

The Government's National Living Wage was introduced on 1 April. Employers should recognise that the new National Living Wage of £7.20 for workers 25 and over is a compulsory rate and ensure they are paying the new rates. 

 

Failure to pay the correct rate could lead to a penalty charge of up to £20,000 for each member of staff underpaid.

 

Employers will need to reflect on the potential impact of the introduction of the National Living Wage. It's worth thinking about:

- How the National Living Wage could level out pay for staff who were previously paid different amounts below the new rate;
- How these changes may lead staff to question pay structures, and how fair and equitable any new structure will be.

 

To learn more about the National Living Wage and the essentials of establishing a fair grading structure come along to one of our National Living Wage training sessions.

 

>>>  Find out more about the National Living Wage

 

>>>  National Living Wage training sessions for employers

 

Younger Workers Guide

New employing younger workers guide

Getting the next generation of workers into the workplace, trained and prepared for the full demands of the job is important for many organisations. To help, Acas has published new free guidance on employing younger workers which is aimed at anyone who is managing or supporting a younger worker.

 

>>> View the guide on our website

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