Encouraging your employees to review their pension savings, could help them see if they could benefit from making changes.
Encouraging your employees to review their pension savings, could help them see if they could benefit from making changes.
Pension plans are one of the most tax-efficient ways your employees can save for their future. They might consider topping their pension up with regular contributions or one-off payments when their budget allows (for example, if they get a yearly bonus).
The government gives tax incentives to pensions, known as tax relief, to encourage pension owners to save more. There are yearly limits before being subjected to a tax charge, with a tax year running from 6 April one year to 5 April the next year.
Encouraging your employees to review their workplace pension savings before the end of the tax year, 5 April, can help them understand if they could benefit from making any changes.
Our pre-complied content can help you to show them how.
Our customer tax year end hub (opens in new window) gives employees access to information on how to grow their pension savings, tax relief, pension contribution limits, important deadlines and how to make a one-off pension contribution.
They can learn more about the tax benefits of making a one-off pension contribution to their plan by reading our article (opens in new window).
To help you support your employees on their pension journey we have a poster, a range of email templates, a digital banner for use on your intranet, an email footer you can use to share information with them and some example case studies for increasing regular contributions based on a range of salaries. These links open in a new window.
Should I increase my regular contributions? (salary exchange schemes)
Should I increase my regular contributions? (relief at source schemes)
Should I increase my regular contributions? (salary exchange schemes)
Should I increase my regular contributions? (relief at source schemes)
You can also find these engagement materials under the Making pension contributions section in your communications toolkit which has lots of support items you can use to prompt employees to revisit their pension savings, and take action if required.
You can also encourage them to read our article (opens in new window) on the tax relief benefits when paying a one-off pension contribution into their plan.
Employees can see what their Royal London pension savings are worth now, contributions made over the last year, and any tax relief, by logging in to our mobile app.
If any of your employees want to make a one-off pension contribution, they can do this by bank transfer or bonus sacrifice.
Bank transfer
If they want to transfer money from a bank account they simply need to fill out a single contribution form (opens in new window).
Bonus exchange
If your workplace pension is set up under a salary exchange arrangement, your employees can choose to exchange all or part of any contractual bonus they receive, in return for a pension contribution. This is called bonus sacrifice.
If your employees receive a guaranteed bonus, you’ll need to give them an agreement letter to sign detailing their bonus amount before and after bonus sacrifice. You can then include your employees’ bonuses in your regular payroll run.
If their bonus is performance related, and isn't guaranteed, you'll still need an informal agreement that any bonus will be paid as an employer pension contribution.
For more information on workplace pensions support available at tax year end speak to your usual Royal London contact or financial adviser.