The Pitfalls of Auto-Enrolment


Posted by: Swindells FP, on October 1, 2012.


On the 1st October 2012 the first round of employees will be automatically enrolled into qualifying workplace pension schemes or the Government back NEST (National Employment Savings Trust). Auto-enrolment has started with the UK’s largest employers with gradually smaller and smaller firms following suit over the coming months.

Whilst ensuring people save towards their retirement is to be encouraged; for some there are pitfalls to be aware of. Swindells Financial Planning, retirement and pension advice experts based in Sussex, highlight the following incidents where being auto enrolled could cost you potentially thousands in tax charges.

Protect your Protection

Anyone who has applied for and received “enhanced” or “fixed” protections (which protect assets that have, or potentially will, be in excess of the Lifetime Allowance) will lose this protection if they are automatically enrolled by their employer.

To preserve these protections employees must opt-out of the auto-enrolment into the pension scheme within 1 month.

Protect your Contributions

Those who made substantial contributions to their pension scheme could face tax charges if they are automatically enrolled into their employer’s scheme and further contributions are made on their behalf.

There is a risk the “Annual Allowance” (the limit placed on the amount of tax relievable pension contributions that can be made) will be breached resulting in tax penalties.

If you have any concerns regarding auto-enrolment or your pension and financial advice in general then please do not hesitate to contact Swindells Financial Planning on 01323 894 202, email seaford@swindellsfinancialplanning.co.uk or by using our booking form below.



|

Enter your email

Get free investment, pensions and wealth management news and advice.

* indicates required

*We will never share your details with any third party.


Categories



Client Stories





Book a consultation


Your Name (required)

Email (required)

Phone Number

Age

Employment Status

Income

What you would like to talk about?

captcha

Enter exactly what you see above






Enter your email to receive free relevant news and updates.

* indicates required

*We will never share your details with any third party.


Latest… View all




Planning for Long Term Care


In our experience, planning and funding for the payment of Long Term Care sits high on peoples lists of concerns and priorities. We had the recent furore regarding the so called Dementia Tax, alongside the ongoing confusion about assessment and eligibility for the State’s (NHS) Continuing Health Care funding. Finally, we are often asked about […]

Read more →


Worried about the Pension Lifetime Allowance?


What is The Lifetime Allowance? Since its peak of £1.8m in the 2011/12 tax year and three subsequent reductions since then to its current £1m level, the Pension Lifetime Allowance (The Lifetime Allowance (LTA) is a limit on the amount of pension benefit that can be drawn from pension schemes – whether lump sums or […]

Read more →


Investment Management – Stop Monkeying Around!


In the world of investment management there is an idea that blind-folded monkeys throwing darts at pages of stock listings can select portfolios that will do just as well, if not better, than both the market and the average portfolio constructed by professional money managers. If this is true, why might it be the case? […]

Read more →


Review existing pensions


As we move through our working life, almost inevitably we can build up a collection of pensions from previous employers and self-employment, amounting to significant six figure sums, but do you need to take any specific action with these pensions? Too often, we see advice centred around simplifying and consolidating all your disparate arrangements, which […]

Read more →