Spring Budget 2017 – Pensions

The lifetime allowance remains at £1m for 2017-8.

The annual allowance remains at £40,000.

There is a reduced annual allowance for those who have started to draw from a pension.  This is currently £10,000 but will reduce to £4,000 from 6 April 2017.

Auto Enrolment

Not a Budget announcement, but I thought it worth a mention.

Auto enrolment staging dates are now coming thick and fast for small employers, so make sure that you do not miss yours.

Very briefly, all employers have to consider auto enrolment unless the only people on the payroll are directors with no employment contracts.

If you have an employee earning in excess of £10,000 you MUST enrol them in a pension scheme, whether they want to be enrolled or not.  They can then make the choice and unenrol themselves, but they CANNOT choose not to be enrolled in the first place.

For those with employees earning less than £10,000, you still have to take action and write to your employees to tell them that they can ask to join a scheme.  If they opt in, you then have to enrol them, and make employer contributions if their earnings are over the lower national insurance threshold (£490 per month, £113 per week).

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