Ryan Oates
Posted By Ryan Oates
26/09/2022

Many employers have not reviewed their workplace pension since it was established to satisfy their automatic enrolment duties.

Since then, the business is likely to have grown considerably, with more staff and a higher wage bill. As a result, greater levels of contributions are being paid in every month.

You may have also relied on your Accountant or Bookkeeper to set up the pension scheme for you – which is likely on standard terms with no employer input. 

Here are the reasons we're seeing increases in the cost of pension packages:

  • The Workplace Pension market has changed and is very competitive. Furthermore, employers want their processes to be streamlined and efficient
  • The rise of National Insurance and other costs are seeing a rise in employers introducing salary exchange (as a method of making employee contributions)

How Can We Help?

We have a proven track record of helping our clients to:

  • Reduce costs immediately
  • Create efficiencies
  • Reduce their members’ pension charges

For example, a SME with 55 staff could reduce their business costs by c£20,000 per annum.  Here’s how1

  Annual Employer saving
Remove employer pension charge2 £1,200
Introduce salary exchange3 £15,180
Reduction in outsourced payroll costs4 £1,800
  £18,180

 

  Annual Member saving
Reduce member charge1 from 0.75% to 0.35%  £5,500
  £5,500

 

The employer’s annual savings can be used to:

  • Introduce other Employee Benefits
  • Mitigate against or cover other rising costs of business
  • Share with members to enhance their pension contributions

The member’s annual savings will:

  • Allow members to accumulate more for their future retirement

 

CLICK HERE to get in touch with our Employee Benefits Consultants to discuss your requirements and find out how we can help

 

1 figures estimated on the following data:

  • 55 members in the company pension making a 5% gross employee contribution
  • Basic salary earnings are pensionable and average salary of £40,000
  • Average pension pot of £25,000

2 Can be achieved by negotiating with existing pension provider or changing pension provider – whichever is most suitable for employer and members

3 Assumes employer retains 100% National Insurance saving (at 13.80%) and 100% staff take-up. Salary exchange is an employment law change and not a pension legislation change – please seek advice

4 Streamlining monthly pension upload can reduce need for external provider to undertake each month

 

Every care has been taken to ensure that this information is correct and in accordance with our understanding of the law and HM Revenue & Customs practice, which may change.
However, independent confirmation should be obtained before acting or refraining from acting in reliance upon the information given.
SG Corporate Services is a trading style of SG Wealth Management who is regulated by the Financial Conduct Authority.
The Pensions Regulator is the statutory regulator for workplace pensions. The Financial Conduct Authority do not regulate some aspects of Employee Benefits.
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