March 2023 - Corinthian

27 March 2023

If you’re not sure, you need to act before 31 July 2023!

The New State Pension will be increasing in April from £185.15 per week to £203.85 (taking it to £10,600 per year) and for lots of us this will be a large proportion of our overall retirement income.
However, did you know that if your National Insurance (NI) records have gaps in them, you may not get this full amount?
At the moment, if you have gaps in your NI records, you can make voluntary contributions to cover gaps back to April 2006. This window was due to end on 5 April 2023, however the deadline has been extended to 31 July 2023. After this date, you will only be able to go back a maximum of 6 years (e.g. from the coming tax year 2023/24, you will only be able to make up gaps as far back as 2017/18 tax year).

So what should you do if you are unsure?

The first thing to do is get a State Pension forecast which will tell you how much State Pension you may get.
You can then apply for a National Insurance statement from HMRC to check if your record has gaps.
If you find you do have gaps in your NI records you may still get the full new State Pension, however, if these gaps prevent this you have some options which I have mentioned in the further information below.
You can also find out more about how filling gaps can affect your State Pension by contacting the Future Pension Centre.

If you would like to know a few basics about who is entitled to the new State Pension and how the pension is calculated I have put some details below.
• The new State Pension is for:
o men born after 6 April 1951 and
o women born after 6 April 1953
• It is based on your NI records when you reach State Pension Age
• You need at least 10 qualifying years to get any new State Pension
• You’ll need 35 qualifying years to get the full amount if you do not have a NI record before 6 April 2016
• You may get less than the new full State Pension if you were contracted out before 6 April 2016
• You may get more than the new full State Pension if you would have had over a certain amount of additional State Pension under the old rules

Qualifying Years
When you are working you will get qualifying years if:
• You’re paying NI contributions which can be either of:
o Employed: earning over £242 per week from one employer
o Self-employed and paying NI contributions (profits of over £11,908)
• You are employed but not earning enough to pay NI but you earn between £123 and £242 a week from one employer
If you are not employed, you may still get NI credits if you:
• Claim child benefit for a child under 12 (or under 16 before 2010)
• Get Jobseeker’s Allowance or Employment and Support Allowance
• Get Carer’s Allowance
• You are ill, disabled or on sick pay

Finally, if you’re not working or getting NI credits you may be able to pay voluntary NI contributions to increase your State Pension amount.

Topping up one qualifying year of £824.20 translates to £275.08 extra per year in state pension. The cost will be increasing from 1st August to £907.40 but you will be getting an extra £302.86 a year in pension due to the increase in April 2023.

For any further assistance with this, please contact your Corinthian Consultant who will be happy to help.

16 March 2023

Here are some of the highlights which may affect you:

Pensions

The Lifetime Allowance (the total amount of money you are allowed to have in your pension without having additional tax charges – which is currently just over £1m) the charge is being removed from 6 April 2023
However, the maximum amount of tax free cash you can take will be 25% of your fund value or the current LTA (whichever is the lower), so maximum is frozen at £268,275
The Annual Allowance (the maximum total contribution that can be paid in during the year) will be increased from £40,000 to £60,000 from 6 April 2023
Also, the Money Purchase Annual Allowance (potentially applicable if you’ve started taking pension income from a defined contribution pension) will be increased from £4,000 to £10,000

Changes for business

The main rate of corporation tax, paid by businesses with taxable profits over £250,000, is confirmed to increase from 19% to 25%
Reduced paperwork for international traders, who will also be given longer to submit customs forms under streamlined rules
Apprenticeships for over 50s to attract a wealth of talent and ability back into the workplace
Enhanced Credit for R&D of £27 for every £100 spent

Inflation

And the last good news for today is the outlook for inflation. It is expected to be 2.9% by the end of 2023 compared to 10.1% at present.

We understand that the recent changes announced in the Budget may raise questions and concerns regarding the impact on your business.

We encourage you to reach out to our Corinthian Benefits team, who are readily available to provide guidance and support tailored to your specific needs.

10 March 2023

Could you benefit from reviewing your arrangements?

A recent survey of over 300 employers with over 3 million savers has highlighted some startling information of where employers and employees could be losing out. The statistics gathered include large employers and it is likely that for small to medium sized businesses, the numbers could be a larger concern.

The report highlighted a number of issues which included the 4 below:

1. 1 in 5 employers are not using salary exchange (sacrifice)

2. 60% of employers are not monitoring the performance of their default fund

3. 87% of employers are not completely confident they would pass the Pensions Regulator’s auto enrolment spot check

4. Over 50% of employers have not reviewed scheme charges in the last 2 years

1. Employers not using Salary Exchange (Sacrifice)

The survey found that around 1 in 5 employers are not using salary exchange and are missing out on substantial tax savings. It also suggested that of the ones who are using it, many of them are not using it effectively.

Salary Exchange can help increase an average UK employees take home pay by £15 per month, whilst saving the employer more than this for each employee.

2. Employers not monitoring the workplace pension default fund

Nearly 60% of employers stated that they hadn’t reviewed their default fund in the last 12 months and 25% said that have not done so in the last 3 years.

Many business owners are not aware that new employees joining the company may be going into a different default fund compared to that of their longer serving colleagues and the fund make up and performances can be completely different.

3. The Pensions Regulator Auto Enrolment Spot Check

From January 2022 to June 2022 the Pensions Regulator issued approximately:

20,000 Compliance Notices
15,000 Fixed Penalty Notices
6,000 Escalating Penalty Notices

In July 2022, with the easing of social distancing restrictions, the Pensions Regulator announced plans to increase its auto enrolment compliance inspections.

The Pensions Regulator stated that its aim was ‘not to catch employers out’, but to ‘make sure employers become compliant’. Clearly it is good practice for employers to be aware of their auto enrolment compliance duties, rather than wait until they are caught out by the Pensions Regulator.

4. Pension Scheme Charges

Over half of the employers surveyed said that they had not reviewed the charges paid by the company, or their employees, in the last 2 years.

With the changes in the pension arena over that last couple of years, many employers could find that they are able to secure lower charges for their pension scheme (meaning less money coming out of their employees retirement savings pots).

Next Step If you feel that you haven’t had the time to review your workplace pension scheme for a number of years, or that you would like to benchmark your current processes, then please get in touch with us. What’s really interesting, is we will review this for you at no cost or obligation – so it won’t cost you a penny!

Adam Gibbs

[email protected]

+44 7899 056 678

Could you benefit from reviewing your arrangements?

The report highlighted a number of issues which included the 4 below:

1 in 5 employers are not using salary exchange (sacrifice)
60% of employers are not monitoring the performance of their default fund
87% of employers are not completely confident they would pass the Pensions Regulator’s auto enrolment spot check
Over 50% of employers have not reviewed scheme charges in the last 2 years

1. Employers not using Salary Exchange (Sacrifice)
The survey found that around 1 in 5 employers are not using salary exchange and are missing out on substantial tax savings. It also suggested that of the ones who are using it, many of them are not using it effectively. Salary Exchange can help increase an average UK employees take home pay by £15 per month, whilst saving the employer more than this for each employee.

2. Employers not monitoring the workplace pension default fund
Nearly 60% of employers stated that they hadn’t reviewed their default fund in the last 12 months and 25% said that have not done so in the last 3 years. Many business owners are not aware that new employees joining the company maybe going into a different default fund compared to that of their longer serving colleagues and the fund make up and performances can be completely different.

3. The Pensions Regulator Auto Enrolment Spot Check
From January 2022 to June 2022 the Pensions Regulator issued approximately:

20,000 Compliance Notices
15,000 Fixed Penalty Notices
6,000 Escalating Penalty Notices

In July 2022, with the easing of social distancing restrictions, the Pensions Regulator announced plans to increase its auto enrolment compliance inspections. The Pensions Regulator stated that its aim was ‘not to catch employers out’, but to ‘make sure employers become compliant’. Clearly it is good practice for employers to be aware of their auto enrolment compliance duties, rather than wait until they are caught out by the Pensions Regulator.

4. Pension Scheme Charges
Over half of the employers surveyed said that they had not reviewed the charges paid by the company, or their employees, in the last 2 years. With the changes in the pension arena over that last couple of years, many employers could find that they are able to secure lower charges for their pension scheme (meaning less money coming out of their employees retirement savings pots).

Sharon Price
[email protected]
+44 79 1599 6884

Don’t leave it too late to review your pension!