Pension is a tax-free pot of cash that you generally save for your retirement. Pensions come in various forms for example – State Pension, Personal Pension or Occupational Pension. They should be designed to enable you to save sufficient money during your working life to provide an income stream for you to live comfortably after you have retired. There are various benefits of putting money aside for pension for example:
• You obtain tax relief at 20% if you are a basic rate tax payer and higher rate tax payers get a further 20%.
• You get a tax-free lump sum when you retire, currently at 25% of your pension pot.
• Any increment in the value of your pension also grows tax free.
Apart from personal pension, Occupational Pension Scheme is a key area that businesses need to focus on as changing rules mean that all businesses need to have an Occupational Pension Scheme in place by April 2018.
With 1.8 million employers looking for auto enrolment advice over the next two years, there will be a shortage of qualified advisers who can provide individual tailored advice for your company in this area. The Pensions Regulator is fining Companies who do not have a pension scheme in place by their staging date ranging from a fixed penalty of £400 to daily penalties between £50 and £10,000.
Setting up an Occupational Pension Scheme can be daunting and costly as you need to take into consideration all of the below points:
• Choose the right pension provider
• Make sure you have informed your employees of their options
• Know how much this will cost your business in contributions
• Calculate and pay employer and employee contributions on a monthly basis
• Talk to your employees about auto enrolment and what this means to them
• Make sure you meet all your regulatory requirements by your staging date
At ASVSH, we have specialist advisers who can help you to plan your pension needs and set up a pension plan for you or your business.