Pension Changes in May 2019: How Will You Be Affected?

TBL Pension Changes May 2019

After the updates to workplace pension contributions last month, May 2019 sees further changes to pensions. This month, the State Pension age is increasing as part of the gradual rises outlined in the Pensions Act 2011, and there are changes to pension benefit rules too. Here are all the updates to be aware of this month.

Recap: Workplace pension contribution updates in April 2019

Last month, the auto-enrolment workplace pensions were updated in line with the new financial year. Minimum contributions from the employer rose from 2% to 3% of the employee’s earnings, while the employee’s contribution rose from 3% to 5% of their earnings. This results in an 8% total minimum contribution. More detail can be found in our April 2019 tax changes article.

6 May 2019: State Pension age rise

The Pensions Act 2011 has set out a series of gradual rises to the State Pension age as life expectancy increases. While subject to amends, the current plan has a timetable in place to increase the retirement age to 66 for both men and women by October 2020 – which itself is an amend on the original timeline to raise the age to 66 by 2026. Ultimately, the plan is to raise the State Pension age to 68 by 2046, although this could happen sooner as the Government push forward with their plans.

To help achieve the October 2020 date, the State Pension age has been increased this month. So, on 6 May 2019, those born between 6 January 1954 and 5 February 1954 will reach State Pension age somewhere between 65 years and four months and 65 years, three months and one day. This is a small change to the previously set State Pension age of between 65 years and three months and 65 years, two months and one day.

15 May 2019: Pension benefit rules change for ‘mixed-age’ couples

Previously, when the eldest in a couple reached retirement age – regardless of the age of their partner – couples could choose to claim pension age benefits. However, a new rule is being introduced on 15 May 2019, meaning that couples will now only be able to claim this credit when both partners are at retirement age.

There will be no changes for mixed age couples who are already in receipt of pension credit or pension-age housing benefit. Read more about this update in Accountancy Daily’s article here.

Planning for retirement

Whether you’re a business or an individual, we offer a series of services helping with pensions and retirement. For individuals, we know that pension planning can be a daunting prospect. That’s why we offer tax-efficient retirement planning services.

Moreover, while the State Pension amount is determined by the recipient’s National Insurance contributions record, businesses must offer a workplace pension scheme to eligible employees.

We can help businesses with workplace pensions through our payroll services. We will ensure your compliance with the latest employment law updates and changes to pensions. Learn more about outsourcing your payroll on our website or call us on 01702 466 886.

Plus, check out our Tax Deadlines Calendar to make sure you keep on top of the key payroll and tax return dates this year.

TBL Accountants are your local accountancy firm operating in Southend and across Essex. We specialise in a variety of services as personal, business, and charity accountants. Want to find out more? Get in touch with our team today.

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