EXCLUSIVE: The University of Lincoln is piloting financial education sessions for its senior management to ensure they are informed about their options around the annual and lifetime allowances for pensions saving.
The sessions, which are part of the university’s financial education programme with Wealth at Work, started with a session for 11 members of the executive board.
It will continue to be rolled out to around 100 more senior-level employees.
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Ian Hodson, reward and benefits manager, University of Lincoln, added: “These employees are more likely to be impacted because they are on a higher salary.
“In the public sector, where we have still got final salary pension schemes, annual and lifetime allowances are massive news. We’re much more prone to individuals who might have a significant pay increase and the annual allowance might affect them in a big way.
“It is the education piece of helping people understand what they need to do and really try to plan their finances, dealing with things proactively, rather than waiting until they get a tax liability.”
During Chancellor George Osborne’s Autumn Statement in December 2012, he announced that the annual pension allowance on which people receive tax relief will be cut from £50,000 to £40,000, and the lifetime allowance would fall from £1.5 million to £1.25 million from 6 April 2014.
The sessions are an hour-and-a-half workshop, followed by a handout with the key facts that employees should take away. “We’re hoping they will see it as a benefit of their reward package, but that the message is right for senior employees, to say: The only reason you’ve exceeded the annual allowance is that you’re in a really good pension scheme and your pension pot has increased that much year on year that it has become a tax liability,” said Hodson.
“It’s more than just understanding the legislation, the calculations and the duties. It’s about educating them about the reward package, making them see how good the pension benefits are and helping people from doing anything knee-jerk, like getting out of the pension scheme.”