The Fizz! Blog

Compulsory staff pensions from 2012

From 2012, employers will be obliged to pay into a personal pension on behalf of their employees, and the employee will be obliged to contribute as well.  Although there had been some speculation that small employers might be exempted, the government has decided that won't be the case. 

Although I'm not sure I agree with the scheme as a whole - instinctively I'd rather state interference in people's choices was limited to just what's absolutely necessary - I think it's quite right not to exempt small employers.  For donkey's years everyone in the business community has been asking for simplification of the rules for businesses, and for donkey's years the government has been responding by making the rules more complicated.  So the move over the last few months towards simplification is very welcome.  If this system's going to come in, far better for there to be no doubt about which employers have to do it and which don't.

If you are taking on employees, then you are taking on responsibility for treating them professionally, like it or not, and it isn't fair for the employees of small companies to be treated less well than those of bigger employers.  If you're not willing to accept the responsibilities of an employer, then you don't have to be one.  Business isn't for everyone.  Let's keep the pension rules as simple as possible.

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ISA allowance to increase - plan ahead

From 6 April 2011, the ISA allowance increases to £10,680 a year, from £10,200 at present.  Of that, half - £5,340 - can be saved in a cash ISA.

Where clients want to save in an ISA, we often advocate setting up a regular monthly payment system.  It's a lot easier to find one twelfth of your target each month than it is to find the lot in one go at the end of March.  We practice what we preach - I have monthly standing orders set up of £425 to a cash ISA and another £425 to a stocks and shares ISA.  Come the end of the tax year, I'll have used my allowances exactly, without missing the money - well, without missing it too much, anyway!  I've just made a diary note to increase those amounts from next April, and if you use a similar system you might want to make a note too.

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