The most recent report from ONS on Pension Trends (Sept 2011), with combined sources of HMRC, ABI and ONS, show that the total contribution by employees to pensions (DB, occupational DC, PP, Stakeholder, FSAVC & RAC) in 2009 was £22.9billion. 

If we believe Alexander and the £7 billion figure quoted to be correct, then broadly this must only equate to the additional 20% relief afforded to higher rate tax payers. This then suggests that tax relief at 40% equals more than £14billion, which must therefore equal a gross contribution by employees of c£35billion. This is clearly incorrect as it is not conceivable that pension contributions have risen by that much since 2009.

It is more reasonable to suggest that higher rate relief costs the Exchequer £3.5billion, assuming that you still provide basic rate relief to all savers.

An unreported and thus potentially unconsidered aspect of Alexander’s comments is the consequence of this action on investment in UK companies. The latest figure available from ONS confirms that a total of £85.6 billion was invested in pension funds in 2009. This is then invested into a wide array of assets, a significant portion back into UK companies.

The removal of higher rate tax relief on contributions, which is of course only deferral of tax as income tax is required to be paid on the income arising in retirement, would likely result in a large proportion of higher rate tax payers no longer contributing to pensions. Whilst this will undoubtedly save the Exchequer the associated tax relief, this would have an immediate negative impact on investment in UK companies and the stockmarket, with associated negative results on industry investment, employment and fund values, all of which would impact the country and all tax payers.

Is this worth the saving of £3.5 billion, not forgetting of course that measures have already been put in place to restrict relief via the Annual and Lifetime Allowance, neither of which have been allowed the time to bed in and thus illustrate their impact.

The following are the main requirements of the new duties imposed on employers:

• Every employer must make a pension scheme available to its employees (known as jobholders)
• The staging date will depend on the number of employees, starting from October 2012 for the largest employers
• All eligible jobholders must be automatically enrolled if their earnings are above a trigger level (to be confirmed shortly, but likely to be around £8,000 per annum)
• Other workers must be given the option to join
• Employers must pay contributions for all eligible jobholders based on their earnings between lower and upper thresholds (likely to be earnings over £5,500 and up to around £40,000 per annum).  These will be known as ‘band earnings’
• The minimum Employer contributions start at 1% of band earnings, rising to 3% by 2018
• Total contributions (including those from employees) must be at least 2% rising to 8% by 2018
• Detailed information must be provided to employees within strict timescales
• Employees may opt out
• Employees who opt out must be automatically re-enrolled every 3 years
•  Compliance with the new duties will be monitored and penalties imposed for failure, including significant fines or even criminal proceedings for wilful avoidance.

Comment - There is much planning and preparation to be done as the staging dates now approach and employers must ensure that they understand the potential impact of the new duties on HR, payroll, recruitment, employment contracts, existing pension arrangements, communications programmes, record-keeping and other administrative processes – let alone the additional costs.

Even if an employer’s staging date is still a year or more away, it is essential that planning commences immediately, if for no other reason than to be able to conduct the normal budgeting process. Costs need to be assessed and incorporated into future projections and built into the pricing of products and services.

Screen4Life provides an in-house cancer screening service the aim of which is to detect the cancer early. In doing so, treatment should be more effective and less invasive and thus provide the employee with a greater chance of survival and ability to return to work.

In order to help Screen4Life focus their services on the needs of employers and the workforce, we would be most grateful if you could spend 5 minutes to complete the following survey.

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The key areas where we can add value are:

Organisational Design

Designing employee strategies, structures and programmes that support business culture, values and strategy.

Employment Environment

Compliant and practical policy and processes using the very latest tools for performance management and development; preparing comprehensive HR audits and due diligence. Developing an inspiring talent brand to promote the employee value proposition.

Communications

Communicating strategy, goals, company performance and achievements.

Employee Relations

Preventing employee issues, providing support to resolve issues quickly and sensitively; managing change.

Our HR Consultancy services team is led by a CIPD accredited HR professional with over 15 years’ experience.  The team has extensive experience in strategic planning, culture development, change management, executive selection, reward and benefits, talent and succession management and performance management.

If you’d like to know about the services we provide and how they might benefit your organisation, please contact Ed Smithson on 020 7614 1026

The appointment of Steve, formerly of Bluefin Corporate Consulting, marks another milestone in the growth of Helm Godfrey as a leading provider in the corporate advice market. Steve joins in the dual role as Senior Consultant and Head of Projects and has been tasked with overseeing the firm’s auto-enrolment proposition.

Steve has more than three decades of experience in the employee benefits sector, beginning his career in 1974 with Sun Life and subsequently working for a number of major consultancies, including Mercer.

Steve was a director of the London Division of SBJ Benefits Consultants until 2009, when it became part of the Axa-backed Bluefin brand, where he remained until joining Helm Godfrey in December.

John Deacon, Director and Head of Employee Benefits for Helm Godfrey, said: “Steve’s appointment demonstrates our commitment to being one of the leading names in the employee benefits sector. His vast experience will be a great strength for us as we tackle – in partnership with our clients – the many challenges which lie ahead in the corporate advice market – not least employer duties and auto-enrolment, where Steve will be leading our efforts.

“We envisage we may recruit more senior people to the employee benefits division provided, like Steve, they can demonstrate high levels of skill, expertise and added value to the business.”

Steve Wood added: “Employers have a great deal on their plates, particularly readying themselves for auto-enrolment and we are here to help them by providing the best advice and assistance available.

“The announcement of a delay for small businesses in implementing auto-enrolment demonstrates the many uncertainties and issues faced by employers in this area.

“However, employers affected by the delay should not become complacent about getting advice in a timely fashion to ensure they do not face problems when the time comes.

“We hope now that there will be no further fundamental changes and we can expect the government to release a full timetable of auto-enrolment key dates in January. I am looking forward to helping employers deal with the many issues the new employer duties create.”

Steve will also be advising companies on all aspects of employee benefit provision including the ongoing transition from trust-based to contract-based pension arrangements.

That is why we at Helm Godfrey place a great of emphasis on the personal and professional development of all employees, from senior management down.

This month it has given me great pleasure to see an example of this as one of our own advisers, Michelle Gibbs, has joined an elite and exclusive group of wealth managers who have achieved both Chartered and Certified financial planner status.

Michelle came here almost straight out of university 10 years ago and, though bringing with her an impressive economics degree, began her career in an administrative role.

In the intervening years she has taken and passed numerous financial planning exams – a huge undertaking in time and effort – and can now count herself among not only our mostly highly qualified wealth management staff, but also the country’s. This is a very significant achievement and demonstrates to clients old and new the calibre of our people and the commitment we have to giving them the best possible advice.

I do not want to embarrass Michelle too much with my praise, but she represents a fantastic example of a new generation of financial advisers who are coming through the ranks and will one day be running businesses like this one.

It is my – and Helm Godfrey’s – policy to encourage staff at all levels and in all roles to seek to develop their skills and improve their performance. I know Michelle will be among the first of many of our people whom I will be congratulating on achieving personal and professional goals and that such successes will ultimately translate into the continued and growing success of Helm Godfrey itself.

Some 30 or so years on, as you now approach retirement, ask yourself: your money or your life. 

The unconscious choice that so many make is that of money over our life: in fact, we are slaves to money: time devoted to paying bills; seeking ‘the best’ investment; worrying whether ‘I have enough to retire on’; as a result, our heavy legs continue to pound the treadmill, work, work, week in, week out, year after year, long hours; job security; fearful of turning on the news to hear of markets falling and thus your pension fund pushing your retirement ever further into the distance. 

At some point, we have all probably said “if I knew then what I know now”.  If so, have you asked yourself “if I am so wise, if I do actually ‘know now’, why am I still waiting to take the right action?” Such sad reflection could be worse if you ever feel the need to utter “if I had my life to live over again……”

Basil Fawlty succinctly summed it up: “What was that? That was your life, mate. Oh. That was quick. Do I get another? Sorry mate, that’s your lot.”

How would it feel to place your life first?  If someone gave you a clean sheet that asked you what do you want to do, to be, to have?

If you’re thinking that I have all the answers, sorry! I haven’t!  But, I do have some questions for you……and it is YOU that has the answers!  Retirement Life Planning is about giving you the time, space, safe environment to let go of your biases, concerns around money and instead decide what it means to you to have the life you desire.

Money may still have some part to play in what you want to do, to be, to have, but instead of controlling you, it will merely act as a facility where you make informed decisions on when and how to use it.  It is important to create a sensible investment approach so you can live your life and leave your investment portfolio to do the job of providing future financial security.

Bringing life and money together, in that order, is where I can help you.

So, take a look at you, your life…….or is it more about the money?

Risk is a part of everyday life and something we have learned to evaluate ourselves, through our own experiences and learned behaviour. Nevertheless when it comes to financial risk you could still be exposing yourself unnecessarily, unaware of the potential consequences to your life and those closest to you. Why do you think this is? Could it be because you do not fully understand the financial risks you are exposed to? Or maybe it could be because you prefer not to address the consequences of those risks? Or even because you don’t want to accept the actions you may have to take to mitigate those risks? Understanding the risks that may affect you is an important step in creating your financial freedom.

Crossing a busy road, for example, is an everyday risk we accept; mitigated by our knowledge, experience and ability to cross the road safely. We would use a zebra crossing or not consider crossing on a bend. We interpret the situation and act appropriately in order to reach the desired outcome – not being run over while we continue our journey from A to B! The same principles could be applied to financial risk yet many often fail to interpret a situation and/or act appropriately. This could potentially lead to unnecessary damaging consequences, which could have been prevented with careful planning. So why not apply the same everyday principles to analysing financial risk?

Working with the right adviser can help you to understand the financial risks you are exposed to and more importantly how planning can address these risks. With this information you can then make informed decisions about your life. Is the biggest risk not speaking to the right Adviser?

It’s our desire to live the life we want that determines what money we need to spend.  Take a step back from daily life and give yourself time to analyse your lifestyle and finances. Ask yourself ‘where’s my money going?’ and ‘how can I make the money I earn work harder for me?’ Using simple and consistent planning techniques can make your money work harder for you without necessarily changing your current lifestyle too drastically and by capitalising on your success through saving or investing your surplus net income wisely. Start making real improvements to your financial wellbeing. Small adjustments can make a big difference!

How do we define being rich? Is it by how much money we have or by how we live life with our money? We can all choose a less lavish lifestyle however we choose not to because we enjoy our habitual lifestyle. Ask yourself ‘how can I live a lifestyle I am happy with today and still prepare financially for tomorrow?’ Engaging with a Financial Planner to explore and visualise ‘what you want out of life?’ integrated with practical financial solutions can help you to manage your financial and lifestyle wellbeing. Start making your money work harder for you!

The deal, which will see Truestone’s employee benefits team relocate to our HQ in the City, will take our turnover for the combined business to over £7m, and in doing so making us one of the largest independently-owned firms in the sector.

Truestone Employee Benefits was launched in 1986 to provide retirement benefits, flexible benefits, group risk and healthcare to small and medium sized businesses. Also based in the City, Truestone has built up a wide and diverse range of clients, all of which will be moving across following the acquisition.

Under the Helm Godfrey banner, the corporate adviser team will continue to be led by John Deacon, who joined Truestone as head of employee benefits in 2004 from Hymans Robertson. John will join the board of the enlarged Helm Godfrey business as a director, reporting directly to me.

This acquisition is a major development for Helm Godfrey and one which will allow us to compete in an area of the market we believe is set for considerable growth over the coming years.  The team at Truestone under John has built up a tremendous track record of delivering a superior service to the SME market which is reflected in the quality of the consultants and clients they advise.

The challenge now is to build on this, taking the enlarged business to the next stage of its growth and development in both the wealth management and employee benefits space and we will keep you fully informed of our progress in this area.