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Carers and nannies to start receiving pension contributions


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.

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