Monday, 23 March 2015

Pensions, Personal Tax Allowances and a Minimum Wage Rise

Changes to pensions, personal tax allowance and minimum wages announced in this week’s budget (Wednesday March 18) will shake up some sectors immensely over the next year, the director of Activ Absence, one of the UK’s leading suppliers of HR management software has claimed.

Chancellor George Osborne unveiled a number of plans that will affect workers and savers in the final budget before the May General Election.

These included measures to reduce the lifetime pension allowance to £1 million from £1.25 million, which he claimed will save £600 million annually.

He also announced plans to increase personal tax allowance to £10,600 this April, and the national minimum wage will increased by 20p an hour to £6.70 in October. The minimum wage for apprentices will increase by 20 percent to £3.30 an hour.

Adrian Lewis, Commercial Director of Codel Software, the developer of Activ Absence, welcomed the changes for workers but said the new pension rules undo a lot of the measures introduced last year that encouraged people to save.

Adrian Lewis said:

“The announcement that more people than ever in Britain are now in work is a very welcome statement for a lot of people.

“Also, with average pay increasing to 2.1% above inflation, it means people could be calling upon their employers for a pay rise. HR professionals will be pleased to hear that a respite from this will come in the form of a higher personal tax allowance.

“Pay packets will now be going further due to a raise in the minimum wage, with a large jump for apprentices of 57p. People do however need to understand more about their people, and the infrastructure in order to increase business.

“However, the key thing is that the lifetime allowance for pensions has dropped, but people can now access their pensions from the age of 55. There is growing concern that people may end up spending all of their money too quickly, and the new freedoms they have could potentially lead to people losing their savings.”

Activ Absence, developed by South Wales technology company Codel Software, is a cloud-based easy to use comprehensive staff annual leave planning and absence management software solution.

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