Carers and nannies to start receiving pension contributions
01/06/2015
People who employ nannies and personal carers may now have to pay them pension contributions.
New regulations mean that 100,000 people may be required to pay their carers or nannies pension contributions, as small businesses employing up to 30 staff will gradually be obliged to offer their staff pensions, under the auto-enrolment programme. This means that even if an employer has only one employee, they are still required to pay them pension contributions.
For example, if someone is employing a carer for £15,000 a year, they will have to make pension contributions of £185 a year within two years of the scheme starting. Pension costs for nannies, who often earn more, might be considerably higher. People who employ cleaners or gardeners will not be affected, unless they pay them more than £10,000 a year.
The new rules brought in for auto-enrolment mean that all employees over the age of 22 who earn more than £10,000 a year will now have the right to a workplace pension - unless they decide to opt out. So far, 5.2 million workers in larger companies have joined the scheme. The aim is for all companies in the UK to be part of the scheme eventually. Employees can face up to a £400 fine if they do not comply.
Elderly or disabled people who have carers organised for them through the local council may have the pension contributions paid for them.
If you have a carer or nannie and would like any more information please contact the Pensions Regulator, who oversee the model.
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Trinity Mirror closes final salary pension scheme
Trinity Mirror, the UK newspaper conglomerate, has revealed plans to close its final salary pension scheme to existing members. The company took the decision to close the scheme to new members back in 2002 as the funding deficit on the scheme began to grow. However, since 2001 the deficit on the final salary pension scheme has increased from a manageable £37 million to £275 million and the press...
Read MoreIs it right that public sector workers suffer for government mistakes?
No matter how the government and various political parties attempt to wrap up the issue of public-sector pensions there is no doubt that public sector workers will suffer one way or another because of decisions made by previous governments. While it is easy to place all of the blame at the doorstep of the Labour Party the truth is that previous governments also played their part. But is it right t...
Read MoreMinisters scrape pension victory
The government has narrowly defeated an opposition amendment proposing to create a "pensions lifeboat" for those struck by failed occupational pension schemes.Ministers defeated the cross-party amendment by 22 votes in the House of Commons after concessions were made to expand the Financial Assistance Scheme (FSA).The FSA will now cover 8,000 more savers, including those whose schemes wound up bet...
Read MoreCalls for disgraced MPs pensions to be reduced
As we have covered on a number of occasions, the MPs expenses scandal has caught the attention of the UK public and ultimately led to the demise of a number of key figures in the UK government and UK opposition parties. However, it has become apparent that because of the very generous pension arrangements enjoyed by UK MPs, even those MPs who are set to resign at the next election will walk away w...
Read MoreUK government targets benefits, tax credits and pensions
The UK government has indicated that future budget cuts will take in areas such as benefits, tax credits and pensions as well as many other different departments and different spending plans. This is the first time the government has formally indicated which areas will suffer most from the expected £60 billion of cuts to be implemented in the short-term. However, is this enough? This comes on...
Read More