I only employ 3 staff, but can I start a company pension?
Discussion
Of course you can start one. Talk to an IFA.
Chances are they will suggest a Group Personal Pension Plan.
The workplace pension reforms won't hit you for several years yet so there is no minimum contribution other than what the provider of the GPPP imposes. To use it to motivate and retain staff though your contribution will need to be meaningfull, say 5% of salary. You will of course get corporation tax relief on that.
Chances are they will suggest a Group Personal Pension Plan.
The workplace pension reforms won't hit you for several years yet so there is no minimum contribution other than what the provider of the GPPP imposes. To use it to motivate and retain staff though your contribution will need to be meaningfull, say 5% of salary. You will of course get corporation tax relief on that.
It's the stuff that the Government is pushing on TV at the moment.
It will mean you have to auto-enrol your employees in NEST or a suitable alternative and you and they have to make contributions to it. Eventually the contributions will reach 5% employee and 3% employer of earnings between the LEL and UEL (NI limits).
If you set up a half decent GPPP now that can be used as a NEST alternative when the time comes.
The IFA will explain it all to you.
It will mean you have to auto-enrol your employees in NEST or a suitable alternative and you and they have to make contributions to it. Eventually the contributions will reach 5% employee and 3% employer of earnings between the LEL and UEL (NI limits).
If you set up a half decent GPPP now that can be used as a NEST alternative when the time comes.
The IFA will explain it all to you.
Your desire to do well for your staff is admirable, but having recently seen two small organisations I know get in to difficulty as a direct result of poor pension implementation, please ensure you take some good advice from a pension specialist experienced in SME requirements, then triangulate that advice before you sign up. Good luck!
hang on?
so NI is no longer part contribution to a state pension? ..and NI keeps going up?
..and now the govt want all businesses including very small ones to make even more contributions under the guise of another pension scheme?
OK, if you are doing reasonably well, I can see this is not unreasonable, but considering how the Govt, the banks and all their chronies have totally screwed the economy and small business prospects, many are struggling to make ends meet, only breaking even if that, and hoping for a return for better times... and I know many business owners that are funding their business from their own meagre private funds, overdrafts or mortguages just to keep going and keep their staff employed and in wages....
.....so now the Govt cook up another scheme that puts further pressure on the meagre financial resources for those where another 3-5% on the wage bill will tip them over the edge for a while yet.
All this will do is encourage the migration to using contract staff even more, and discourage the continuance of small businesses starting up or having a tough time of it at the moment.
They obviously have NOT thought this through!
I dispair on the stupidity and bad timing....
..then next thing the Govt will do is insist that all employess have private health insurance as well, contributed to by the business...
...and of course NI will still be taken!
Cake and eat it? Oh yes Minister!
so NI is no longer part contribution to a state pension? ..and NI keeps going up?
..and now the govt want all businesses including very small ones to make even more contributions under the guise of another pension scheme?
OK, if you are doing reasonably well, I can see this is not unreasonable, but considering how the Govt, the banks and all their chronies have totally screwed the economy and small business prospects, many are struggling to make ends meet, only breaking even if that, and hoping for a return for better times... and I know many business owners that are funding their business from their own meagre private funds, overdrafts or mortguages just to keep going and keep their staff employed and in wages....
.....so now the Govt cook up another scheme that puts further pressure on the meagre financial resources for those where another 3-5% on the wage bill will tip them over the edge for a while yet.
All this will do is encourage the migration to using contract staff even more, and discourage the continuance of small businesses starting up or having a tough time of it at the moment.
They obviously have NOT thought this through!
I dispair on the stupidity and bad timing....
..then next thing the Govt will do is insist that all employess have private health insurance as well, contributed to by the business...
...and of course NI will still be taken!
Cake and eat it? Oh yes Minister!
Edited by 3Dee on Friday 5th October 17:40
NI still goes towards a state pension, however a state pension isn't large enough to live off and isn't sustainable at it's current level (so will go down in relative value). This isn't a secret tax as the money is going into a private pension.
The idea is to try and turn the UK into a state of savers to have pension provisions which are supplemented by the state.
The idea is to try and turn the UK into a state of savers to have pension provisions which are supplemented by the state.
Ollerton57 said:
NI still goes towards a state pension, however a state pension isn't large enough to live off and isn't sustainable at it's current level (so will go down in relative value). This isn't a secret tax as the money is going into a private pension.
The idea is to try and turn the UK into a state of savers to have pension provisions which are supplemented by the state.
which 'state pension'? ... there's at least two The idea is to try and turn the UK into a state of savers to have pension provisions which are supplemented by the state.
- the basic state pension which there is no opt outs from
- S2P / SERPS which can be opted out and that used to contribute to an employers scheme - the whole thing aobut opting out and why if people opt out of exisiting employers schemes their NI goes up ( to pay for S2P) and also their tax goes up becasue any thing else 'left' by opting out is now taxable income
thern there's the new NEST etc stuff which the government doesn't explicitly pay into ( employers and employees do ) although the government does 'contribute' in terms of the tax positions of both companies and individuals
Setting up a 3 man GPP is going to be pretty much impossible. The minimum average contribution is approx £750 per annum per person. The main issue for you is Auto Enrolement, which is the new legislation recently introduced. Any GPP in force will need to be "same or better than" in respect of contribution levels , to enable exemption from the new regs. NEST is simply a default scheme choice, which is not government run.IIRC go to nest.gov.uk for guidance on staging dates & contribution levels, with having so few employees, your responsibilities do not come into force for a few years yet. It may be an idea to put in place some form of death in service initially, then review pension needs in the future.HTH.
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