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17 February 2022

In April 2022 National Insurance contributions will increase as part of the Governments plans to resuscitate the NHS post Covid-19. The 1.25% rise in contributions has been labelled the Health and Social Care Levy and is forecast to raise an additional £11.4bn in revenue for the NHS and social care.

But how will this increase affect employees? And what are the benefits, or lack of, for salary exchange schemes?     

What is salary exchange?

Salary Exchange schemes allow employees to use some of their gross salary (before tax) to pay for a number of approved benefits – including childcare, pensions, cycle to work schemes and low emission vehicles. Certain benefits come with additional caveats; for example, if a car emits more than 75g/km CO2 then they are taxed as a benefit in kind and exchange schemes must not reduce an employee’s cash earnings below the National Minimum Wage (More information can be found on the gov.uk website here). 

What do the April changes mean? 

Currently employees pay NICs at 12% for income between £184 and £967 per week. Everything over £967 is at 2%. This is increasing to 13.25% and 3.25% respectively. 

It isn’t just employees who will be affected by the rate change. The Employers contribution rate will also rise from 13.8% for income over £170 per week to 15.05%.  

In simple terms someone earning the average basic rate salary of £24,100 will pay £180 a year more whilst the average higher rate earner on £67,100 will pay £715 more. 

What are the negative sides to salary exchange?

A lower salary can also affect future entitlements to things like maternity or paternity pay, some state allowances and potentially, mortgage applications. 

Other employee benefits linked to your salary (such as life insurance) may be affected. 

Your employer or benefit provider should be able to explain the effects based on your personal circumstances. 

What can you do about the increase?

Unfortunately, nothing can be done to avoid the increase as it is implicated by Parliament and applies to everyone who is paid a salary. Even Directors who pay themselves in dividends will be affected as the rate on dividends taken is also due to rise. 

Whilst you can’t avoid the increase the best way to counter it is to look at using your gross salary to its maximum effect.  

Whilst you can’t avoid the increase this could be the time to consider using a salary exchange scheme towards an electric or plug-in hybrid car with lower emissions (under 50g/km) that fall into the ultra-low vehicle tax bands introduced in 2021. 

If you would like to discuss any aspect of salary exchange and employee benefits we would be happy to hear from you. 

*Referred to as salary sacrifice by HMRC 

14 January 2022

We have a range of tools to help you address staff turnover.

Many will not cost you a penny, but could save you thousands of pounds.

Read part two of our two part series on Staff turnover, with our latest article “Solving The Great Resignation” available now!

30 November 2021

We have a range of tools to help you address staff turnover.

Many will not cost you a penny, but could save you thousands of pounds.

Read part one of our two part series on Staff turnover, with our latest article “Let’s talk about The Great Resignation” available now!

22 October 2021

(S)Caring Employers are introducing new benefits to support their employees’ wellbeing.

Health plans can provide a whole range of affordable benefits.

The options for your employees are freakishly good!

19 August 2021

The summer months seem to be passing by quickly, along with the promised August heatwave!

I have pleasure in attaching our August Insights Newsletter and delighted to share some interesting articles provided by our friends at Supportis, Stockdales and Scottish Widows.

If you have an article, or short blog that you would like to feature in our Newsletter, please do let us know.

In the meantime, we hope you have an enjoyable remainder of the summer.

Corinthian Insights Newsletter – August 2021

16 July 2021

I have pleasure in attaching our July Insights Newsletter and delighted to share some interesting articles provided by our friends at Beaufort Financial, Fleet Evolution and Pink Spaghetti.

As ever, should you have anything you wish to discuss please let us know.

Corinthian Insights Newsletter – July 2021

30 June 2021

Well wow! We didn’t expect this! To be shortlisted for not one but THREE Corporate Adviser Awards is brilliant – what a result.

This is a prestigious, industry-wide recognition of the highest professional standards and innovation demonstrated by the whole Corinthian family.

We are shortlisted for the following #CorporateAdviser awards:
🏆 Best Pension Adviser

🏆 Best Health & Wellbeing Solution

🏆 Corporate Adviser Firm of the Year

Dust off your posh frocks, because the winners in each category will be revealed at Corporate Adviser’s annual awards ceremony at the Marriott Grosvenor Square in November.  THANK YOU to all our team members who made this happen!

I hope that you, your family and colleagues remain safe and well.  It seems impossible that we are halfway through the year!

I am delighted to attach our June 2021 Corinthian Bulletin, please do take a few minutes to have a read about our latest updates, from new colleagues we have welcomed through to a sneak preview of our new look Corinthian and some good news stories.

Should you have any questions or comments from this please do let us know.

Corinthian Bulletin June 2021

 

17 May 2021

A new report from Standard Life Aberdeen has found that two thirds of people who will be retiring in 2021 don’t have enough money in their pension pots to sustain their retirement income.

The report also found that although those retiring in 2021 plan to spend an average of £21,000 a year, which is around £10,000 less than the average UK household income, many are still at serious risk of outliving their pension fund.

In fact, even with the state pension, only one third of this group will have enough money to support themselves for the entirety of their retirement if they plan on spending the £21,000 a year. Furthermore, even though the average pension fund of this group is £366,000, a third have less than £100,000 saved.

Despite the concern that many who are planning on retiring this year will not outlive their retirement fund, Covid-19 has resulted in many people accelerating their retirement plans.

Here in the UK, the Covid-19 pandemic has resulted in multiple lockdowns, job uncertainty and health concerns, all of which are reported as reasons why some people have decided to retire earlier than they originally planned. However, according to the Standard Life Aberdeen report, only 39% feel “very confident” that they’re financially ready to finish working and more than 37% of those planning to retire are concerned that they will not have enough to sustain themselves for the entirety of their retirement.

Retiring is one of the biggest life decisions and transitions a person will make and with longer life expectancy, volatile markets and changing regulations, not to mention the impact of the Covid-19 pandemic, it can be an incredibly confusing time.

As the Standard Life Aberdeen report has shown, retirement takes careful planning and preparation and although pension pots tend to be the most prevalent option for pension funds, retirees should also consider any of their other savings or assets that could be used to fund their retirement.

Retiring during a pandemic comes with many challenges, but it will be much easier to adapt your retirement plan than starting from scratch.

Corinthian can help you meet your retirement dreams. Get in touch – we would love to have a chat! Please contact us at [email protected] Tel: 0845 2419541

29 April 2021

I have pleasure in attaching our May Insights Newsletter and delighted to share some interesting articles provided by our friends at Flourish in Mind, Travel Counsellors, and one from Corinthian on Health Cash Plans.

As ever, should you have anything you wish to discuss please let us know.

Corinthian Insights Newsletter – May 2021