test | Help and support

What is the maximum employer’s contribution?

Niki Smith — Wed, 08 Feb 2017 14:28:36 +0000

There’s no maximum employer contribution – employers can pay any amount of pension contributions for their employees. If employers choose to meet the total minimum pension contribution required by law, the employee doesn’t need to contribute (but they can if they want to).

Remember, employer contributions still count towards the employee’s annual allowance.

To increase your pension contribution for an employee, set up a new worker group with higher employer contribution amounts. Make sure this is also changed in your payroll software.

Tax relief on employer contributions

Employer pension contributions are paid gross and put through the business’ account as an expense. This is then deducted from profits before they’re assessed for either corporation tax (companies) or income tax (self-employed or partners).

Tax relief isn’t automatic and it’s up to the employer’s local inspector of taxes whether the employer receives tax relief on the whole contribution. To qualify for tax relief as an expense, pension contributions must be made wholly and exclusively for the purposes of the business.

HMRC guidance highlights pension contributions generally pass the ‘wholly and exclusively test’ and qualify for tax relief. But if there’s a clear non-trade purpose, tax relief may be restricted or not allowed.

This is a complex subject and more details can be found on the Government’s website.

Are my investments covered by the Financial Services Compensation Scheme (FSCS)?

archie.homer — Fri, 02 Dec 2016 15:04:00 +0000

Currently, all contributions are invested by State Street Global Advisors Limited in highly regarded, mainstream pooled investment funds, accessed through a long-term insurance contract with Managed Pension Funds Limited (MPF). This is a typical investment structure used by many pension funds in the UK. In the event that MPF becomes insolvent, it may be possible for any deficit to be recovered from the Financial Services Compensation Scheme (FSCS). The FSCS website at www.fscs.org.uk advises that for claims relating to long-term insurance policies, the maximum compensation is 100% of the claim with no upper limit. However, we believe that this position has yet to be tested.

Find out how your investments are protected by FSCS

How will accessing my pension pot affect my means-tested benefits?

archie.homer — Fri, 02 Dec 2016 15:00:42 +0000

Withdrawals from your pot may have implications on your entitlement to means-tested benefits. There are rules around how your withdrawals from your pot will be treated in the calculation of your entitlement to the following income-related benefits:

Employment and Support Allowance (income-related)
Jobseeker’s Allowance (income-based)
Housing Benefit
Pension Credit
Income Support
Universal Credit

How do employees get their joiner information?

Karishma Mulji — Tue, 21 Apr 2015 11:46:48 +0000

The People’s Pension send out joiner information to employees by post or email, depending on the option chosen by an employer when setting up the account.

Joiner information selected for delivery by email will be sent within 2 working days of the file being uploaded or the enrolment date, whichever is the latest.

Joiner information selected for delivery by post will be sent within 5 working days of the file being uploaded or the enrolment date, whichever is the latest.