Pension Advice Vouchers is a new salary sacrifice scheme that helps employees save on the cost of financial advice. Given the huge impact that financial advice can make, it’s essential that employers look at ways to increase accessibility as much as possible.
Below are five reasons every employer should be looking to offer Pension Advice Vouchers in their workplace.
1. Financial advice is for everyone
One common challenge faced by employers is the need to provide benefits that work for all employees - regardless of their seniority or salary. Sometimes this has held employers back from offering financial advice benefits since they saw it as only relevant to senior employees.
In fact, whether someone would benefit from financial advice often has little connection to the size of their pay check or the seniority of their position. Some individuals have complex personal circumstances the employer is not aware of (e.g. a family member with long term illness or disability). Others might be worried about buying their first home, or providing for their children over the long term.
Most importantly, anyone approaching retirement will likely have built up a significant pension pot over the years. With new pension freedoms changing the rules around accessing your pension, it’s more important than ever that these employees have help working out the best way to ensure their comfortable retirement.
With Pension Advice Vouchers, employers are in a unique position to help all of their employees lower the cost of advice they need to improve their lives.
2. Employees can save up to £310 per year
With Pension Advice Vouchers employees could save up to £310 per year on the cost of financial advice. This alone will make advice affordable and accessible to many people who would not have managed to afford it before.
When an employee requests a Pension Advice Voucher, they agree to have their salary deducted by up to £500. They therefore only pay tax on the remaining amount. The deducted amount will then either be paid back to the employee (tax-free) if they have already paid for financial advice, or it will be paid to the financial adviser directly.
So if a financial adviser charges £500, the employee could sacrifice as little as £190 of net pay (depending on their tax bracket) in order to pay those charges in full.
Unfortunately, our research suggests that approximately £230 million is lost each year by employees in the UK who have paid for advice, but not been able to reclaim the tax they are entitled to.
3. It’s no cost to employers
The employee isn’t the only one who saves with Pension Advice Vouchers - the employer also lowers their tax bill! When the employee sacrifices part of their salary, the employer is able to pay less in national insurance contributions.
This tax saving completely offsets the 13.8% administration fee charged by Pension Advice Vouchers, effectively allowing employers to offer the scheme to employees at no cost to the company.
4. All requests are verified
When a new salary sacrifice scheme launches, it’s natural for employers to be cautious about complying with the law. Fortunately, the Pension Advice Vouchers team verifies every request for vouchers to ensure that the type of advice received meets the HMRC guidelines.
Pension Advice Vouchers is owned and operated by VouchedFor - the UK’s leading reviews website for financial and legal professionals. This allows us to ensure that employers don’t have to spend time or energy investigating whether a financial adviser is genuine before approving voucher requests.
5. It’s quick to set up and manage
No one wants more tasks and admin added to their to do list, which is why the process is as straightforward as possible. It takes just 2 minutes to register for your company on the Pension Advice Voucher website, and it's also available through multiple Employee Benefits platforms. Once you're registered you can start to receive and approve requests from your employees.
Once per month you’ll receive an invoice with a list of employees who have agreed to have their salary deducted, and a total amount to be paid to Pension Advice Vouchers. We’ll handle everything else from verifying the requests to paying out the cash value of the vouchers to the right employee.
So, why should every employer offer Pension Advice Vouchers? It’s a unique way for great employers to lower the cost of expert advice. It costs nothing for the employer to offer it, and couldn’t be simpler to manage.
Go to www.pensionadvicevouchers.co.uk to register your company today!