The Insider - October 2012


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The Insider - October 2012

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The Insider - October 2012

  1. 1. 18 Hyde Gardens Eastbourne BN21 4PT East Sussex 01323 431 200 INSIDER OCT 2012Welcome to your Octobernewsletter. Auto-enrolment isfinally kicking off and this monthwill see the largest employersautomatically enrol their workersinto a qualifying pension scheme. Doyou and your employees know about the changes that are happening?Meanwhile, as new employee regulations are typically brought in twice a year, October also sees a rise in the nationalminimum wage. Elsewhere, we touch upon the Government’s initial announcement of a new state backed business bankas a solution to SMEs struggling to access finance. Finally, in Your Money, we explore why auto-enrolment is just one ofmany issues altering the pension landscape; other imminent changes to the state pension and child benefit may promptyou to review your retirement and pension plans.Auto-enrolment begins Minimum wage The Low Pay Commission - the independent1 October sees the first with information about the advisory body to the Government - reviewsround of eligible employees forthcoming changes, yet the national minimum wage according toautomatically enrolled into a according to research, up to 10 inflation on an annual basis. The rates thatworkplace pension scheme, million workers – around 52 come into force from 1 October 2012 are: žžThe adult rate for workers aged 21 andas employers with more than per cent of the UK’s working120,000 in their PAYE scheme population - are unaware of theare required to auto-enrol. new rules which will see both above will rise 11p from £6.08 to £6.19These larger employers will the employer and employee per hourhave been working hard to contributing towards a pension. žžThe development rate for workers agedput provisions in place for 18-20 will stay the same at £4.98 to perthe change, but with smaller It’s important to be up to speed on your duties as an employer hourbusinesses gradually followingsuit, what is your business regarding auto-enrolment, žžThe 16-17 year olds rate will stay thedoing to prepare for the new put provisions in place, and same at £3.68 per hour inform your staff about what žžThe apprentice rate will rise by 5p fromlegislation? is happening, or you could riskAs an employer, it is your significant penalties. £2.60 to £2.65 per hour.duty to provide workers We can help with employee issues and PAYE. We can help you with your auto-enrolment duties and Please talk to us to find communicate with employees. out more.
  2. 2. A new Business Bank for small and medium sized businessesThe Government has launched various finance schemes exporters will be the bank’s main targets and it aims to bein the last couple of years aiming to tackle the ongoing open for business within the next 18 months.difficulties small businesses face when accessingfinance. Last month, it announced a new £1 billion Although business groups have welcomed the plans, theyGovernment-backed business bank to bring together have also speculated that the new bank will only replacethe raft of existing finance schemes, create a single schemes such as the Funding for Lending Scheme, Enterpriseport of call for information and advice, ‘shake-up the Capital Funds and the Enterprise Finance Guarantee scheme,market’ and boost lending to small businesses, in a and offer nothing new. Others were keen to highlight that amove that it hopes could attract up to £10 billion extra rebranding would not be enough to help Britain’s strugglinglending capital from private sector investors. SMEs and that increased backing would be needed.Although the scale and timing of the plans are still Full details are expected to be unveiled at the Autumnunder discussion, the Government has indicated that Statement which has now been confirmed to take place onthe new bank will operate through existing lenders and 5 December 2012.facilitate long-term lending, possibly loans and otherlong-term finance with a maturity of up to ten years. We would be pleased to advise regardingHigh growth companies such as manufacturers and your business finance options.YOUR MONEYThe big pensions shake-up – is it time for a review?Planning for retirement is always invested. It could be beneficial into force next year. The benefitimportant, but with big changes to discuss these options with will gradually be withdrawnhappening this month regarding those affected. from households where žžWill a new single tier statepensions in the UK, and more individuals earn more thanpossibly afoot in the future, now is a £50,000, with a one per centparticularly good time to consider or pension affect your income? income tax charge of the benefitreview your retirement plans. Research from the Department amount applied for every of Work and Pensions (DWP) £100 over this income level.What’s happening? in August revealed that British Depending on your earnings, pensioners receive anythingžžAuto-enrolment of employees some households may have from £7 to £230 a week in their benefit cut altogether. In into a pension scheme will state pensions. The research some cases putting more into a begin for employers with more also heightened the case for pension pot could be beneficial, than 120,000 people in their the introduction of a new single but it’s always best to seek PAYE scheme from 1 October tier pensions system next year, advice. 2012, and you may want to which would take the state consider how this may affect pension to £140 a week; a Retirement planning your household’s pension boost for some, but a loss for is complex and will income. Auto-enrolment could others. Relying on your state depend on your be into a qualifying pension pension is usually not enough, personal circumstances. scheme chosen by the employer and underestimating your Please speak to us for or into the default National final pension could affect your professional advice. Employment Savings Trust quality of life in retirement, (NEST) which is backed by the meaning prudent pension Government. Alternatively, you planning is vital. October’s Money Facts could choose to opt out of auto- enrolment and invest in your žžOther recent research reveals Current bank rate 0.5% own personal pension fund, that higher rate taxpayers may channel more money into their Quantitative Easing £375 billion but which is the best option for pension savings in an attempt to Scheme you? For instance, choosing a personal pension may allow you avoid losing out on child benefit Current inflation 2.5% to make your own decisions payments when new rules come about where your pension pot is