There may be trouble ahead
But while there’s moonlight and music
And love and romance
Let’s face the music and dance

So sang Fred Astaire. I have to say that whilst the world of employee benefits, and pensions in particular, lacks moonlight, music, love and romance, it’s pretty well stocked with trouble at present.

Those that attended our event last week will recall that when I introduced The Minister for pensions at the start of the seminar, I gave a whistle-stop tour of all the current pension changes that employers are having to prepare for (and there is an awful lot going on).

One subject that I passed over briefly was the subject of higher-rate/top-rate tax relief within pension schemes. Many will recall that this went back to the previous administration, and that only last October the rules were changed to significantly reduce the level of pension contributions that a higher-rate tax payer could make to a scheme whilst still enjoying full tax relief.

The revised annual limit of £50,000 was broadly welcomed by all sides. It certainly limited the amount of tax-relief the government was providing for the perceived ‘fat cats’, but also kept senior employees engaged with pension planning. This is important as these same senior employees are the ones that, in many smaller employers, make the key decisions regarding the support and funding of company pension schemes. This in turn benefits the whole workforce, including the lower paid, and also goes a long way towards reducing the UK savings gap, which going full circle is ultimately good for the Government and Treasury.

So everything is rosy then?

Maybe not. The subject has been stirring again in 2011, and The Minister himself spoke on this area at our seminar, which engaged my interest, more in what was not being said than what was.

A well known journalist in this area, John Lappin, was at our event and also picked up on this. Rather than re-invent the wheel, I would refer you to his post on the event at the following link which picks up The Minister’s comments on this area, and the logical conclusion of the comments.

https://www.themoneydebate.co.uk/?p=3115

If you couple this with the possible attack on Salary Sacrifice (more on this to follow next week), there really may be ‘trouble ahead’.

So get you dancing shoes ready as employers, employees, and the pensions industry may once again have to face the regulators music and dance accordingly.

Best regards

Steve