We’re going through changes…

I had an interesting conversation yesterday with an employer, which shows how much you can tell people something and they don’t listen. I’ve been working with this particular employer for several months looking at their data issues and how they can assess their employees each payroll cycle.

At the beginning of every project I outline to every client how the assessment process will work and one of the questions I make a point of asking is “how much spare time do you have between payroll cut-off and the time you pay”. The answer from payroll is indubitably “never enough”.  

Auto-enrolment imposes new duties on the employer, which must take place between the payroll cut off and pay date. The chances are that you might have to make some serious changes to the way the company works to accommodate this. This might mean bringing the cut off date forward or being tougher on timesheets. 

Whatever happens, you are going to have to consider how auto-enrolment is going to fit into your business as usual in a workable fashion.

 

Rob Barksfield

Auto-enrolment Consultant 

Telephone: +44 (0)20 7893 3972

Email:  contactus [@] broadstoneltd.co.uk

A telling off

Right, today I'm putting on my schoolmaster's hat and sending you to detention, your punishment is to write out a hundred times "I will start to plan my auto-enrolment early enough".

We're now entering the busiest part of 2014 – for me & my team there won't be much free time between now and August. The workload is planned and we know what we have to do to look after our existing clients, but it's the new clients who present us with a problem.

So many employers have simply not left enough time to prepare – two weeks before the February 1^st staging date and I was sitting with employers who haven't even started their planning – you might need to implement a new pension scheme, review employee contracts, change your payroll process. Two weeks isn't enough to make any of those changes.

Please do yourself (and your auto-enrolment consultant) a favour – start your planning at least three months before your staging date.

 

Rob Barksfield

Auto-enrolment Consultant

Telephone: +44 (0)20 7893 3972

Email:  contactus [@] broadstoneltd.co.uk

Where blossomed many an incense-bearing tree

Indulge me, but for those who saw my last post, the heading will make sense.  As a follow up to my garden related synopsis of the UK economy, Tuesday saw that the inflation figure for the UK has fallen below 2%. This is interesting as it is the first time that it has dropped below the Bank of England's target for inflation for four years. Secondly, it adds more credence to the view that interest rates are not going to rise any time soon in the UK, despite the pick up in GDP and the unemployment rate dropping close to the 7% mark. 

The latter, you will remember, was the rate at which the Bank of England would start to even consider interest rate rises.  Despite the media's best attempts to whip up fear about interest rate hikes on the way,  this was never the trigger that the Bank of England would have used to increase rates.

As I mentioned in January, it really does seem that interest rate rises are still some way off, as at least for now, the UK enjoys GDP growth and low inflation. 

 

 

Matthew Phillips

Managing Director

Telephone: +44 (0)20 7893 3456
Email: getintouch [@] broadstoneltd.co.uk

What is a pension?

Actually this is a pretty good question, given that several million people will have one by 2017 and as I know from years of employee pension talks that not many people actually understand what they are.

The technical answer probably runs something like “a tax efficient savings vehicle with limitations around contributions and decumilation” – which means nothing to anyone outside the pensions industry!

Simply put its “one way of saving for retirement that’s got a few incentives to it”. Now I do like a good pension plan. It’s one of the ways that the Government encourage people to save.

If a person puts in 80p then they get the other 20p they’ve paid in income tax put into the pot as well (more if they’ve paid a higher rate of tax). It’s invested in the pot and hopefully grows tax efficiently in the pot until you take it out (although the value of the investment can go down as well as up).

Once the money’s in the pension, it can’t be accessed until you are 55 – which is great for stopping you spending it on holidays / cars / extensions – it’s not supposed to be for that type of expenditure.

There’s been a lot of bad press about pensions over the years and I’ll be the first to admit that they aren’t perfect. However, for a lot of people they are a very good way of saving for retirement. We are helping employers cope with new legislation where they have to auto-enrol employees into a pension. You’ll find more information on our website.

Rob Barksfield

Auto-enrolment Consultant

Telephone: +44 (0)20 7893 3972

Email:  contactus [@] broadstoneltd.co.uk

Financial worries at work

I was intrigued by the results of a piece of research released by Scottish Widows recently.  According to the research conducted, 14% of Britons spend an hour or more a day worrying about or dealing with money worries.  This is quite a stark statistic, a 10-15% drop in performance of 10-15% of your workforce. 

Within the same research 85% of people agreed that having a plan in place helps to ease worries and anxieties. This certainly chimes with our experience of delivering financial education combined with individual planning.  People do not want, nor often need, financial products.  They need reassurance, they need challenge, they need strategy.

With banks rapidly removing themselves from the advice space there is a desperate need for financial education.  Employers can help fill this void by partnering with a Chartered Financial Planning firm like BROADSTONE who specialise in strategy not product sales.  The results can be very impactful and lead to a more focused and productive workforce.

Matthew Brown

Regional Director


Telephone: +44 (0)20 7893 3456

Email:  getintouch [@] broadstoneltd.co.uk

   

Auto-enrolment: No time like the present

There are many quirks that I’ve come across when looking at auto-enrolment pensions with clients, one of my favourites is how you treat a zero hour contract worker for auto-enrolment. Like it or not, if they have a contract of employment with you and you pay them through your payroll, then the chances are that you will still have to assess them for auto-enrolment – although I have to caveat that and say you should seek legal advice.

Now, this shouldn’t hopefully be too much of an issue for most employers – you’re already going to be assessing the rest of your employees, so you’ll just have to add the zero hour workers onto the list. Not so bad for the smaller employers, but having just dealt with an employer of 900, where 850 employees have zero hours contractors I have seen it cause some challenges!

If you are a cost conscious employer, it shouldn’t dramatically increase the pension bill either, since many of these workers earn less than the £787 per month to trigger auto-enrolment, plus you can use postponement to mitigate the cost further.

The main challenge around zero hour working is the payroll data. These workers by their nature tend to come & go quickly and getting timesheets in for their irregular hours is not always easy. So if you have zero hour workers, you might need to look at earlier cut off dates for getting information into payroll, so that you can fit in the auto-enrolment assessment with enough time to spare.

Rob Barksfield

Auto-enrolment Consultant

Telephone: +44 (0)20 7893 3456

Email:  contactus [@] broadstoneltd.co.uk