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Increased businessmileage DATA, DERIVED from global expenses app ExpenseOnDemand, reveals business trends since the lockdown in March 2020. The data, from thousands of the apps’ users, shows that: ● public transport expenses have dropped from 18% to only 5% of total claims, and
Workplace savings RESEARCH CONDUCTED by Cushon, the workplace savings provider, has found that 40% of businesses now offer their employees access to a workplace savings scheme. Of those employees using a scheme, 30.88% like having the ability to save directly from their pay, and 25.59% think it’s better than using high street banks. Statistics released at the end of September 2020 by the Office for National Statistics (http://bit.ly/3rpMrfl), found that in the lockdown period April to June the level of disposable income being saved rose to 29.01%. The reasons UK individuals give for putting money aside, include: something to fall back on should unexpected circumstances occur (40%); retirement (25.99%); deposit for first home (17.03%); and for their children (15.08%). Steve Watson, head of proposition at Cushon, commented: “Financial wellbeing has never been more important and using the workplace to foster greater savings habits is a really effective way of encouraging more people to save”, adding that “regular savings habits can really help navigate life’s ups and downs and help individuals feel more in control of their financial situation.” Maternity leave costs NEW RESEARCH from Direct Line Life Insurance reveals that women taking maternity leave collectively lose out on £3.2 billion in earnings, a fall of nearly half their average annual salary. ● mileage expenses have increased by over 290%, accounting for 90% of all expense claims as employees opt to use private vehicles for business travel. The hotel and air travel sectors are the hardest hit, with both now accounting for just 1% of claims, down from 16% and 20% respectively. With many companies extending their working from home policy, these sectors are unlikely to see an increase in business customers until at least early 2021. Sunil Nigam, founder at ExpenseOnDemand, commented: “The increased activity on the ExpenseOnDemand app highlights that many businesses are still very active and continuing to adapt to new ways of running their business. These trends are being mirrored by our users across the global as the international markets adapt in the same way as UK businesses.” The average year-long maternity leave only covers around 54% of the typical female salary. Just 18% of expectant and recent mothers are in a secure enough financial position with no need to cover the shortfall; 76% find a way to cover the loss of earnings; 19% have been given financial support by friends and family. The loss of income means expectant and recent mothers either cut back on expenditure in order to save money or they rely more on other household income. They save money on items like groceries and clothes (both 28%); 17% stated their partner had to work longer hours; and 13% reported that their partner got a second job. Further findings include: ● 4,000,000 workers are not happy with the amount of fully paid parental leave that their company offers ● half of UK adults – 29,000,000 people – believe the two-week statutory paternity leave for new fathers should be longer ● one in three recent or expectant mothers intend returning to work on the same hours that they were on previously before maternity leave, compared to one in two fathers ● one in eight fathers returned to work on a part-time basis having had a child, with 11% working more flexibly and 3% not returning at all.
Pensions tax relief THERE ARE rumours that the chancellor of the Exchequer, Rishi Sunak, is attracted to reforming pensions tax relief so everyone receives flat rate income tax relief of 25%. The effects of doing this, include: ● basic rate taxpayers would receive a boost to their defined contribution retirement pots – a 22- year-old on average pay of £27,000 paying 4% in contributions could be £21,000 better off by state pension age ● higher rate taxpayers would lose out – a 35-year-old earning £60,000 paying the same 4% could lose out by £85,000 or would need to contribute an extra £50 per month initially to maintain
current retirement aspirations. Steven Cameron, pensions director at Aegon, commented: “Before implementing a move to a flat rate of pensions tax relief, more thinking is needed on how this would work for those contributing to a defined benefit or final salary scheme. Here, the pension benefits they receive are based on their final or career average salary and not on the amount their contributions grow to after tax relief and investment growth. For consistency with those contributing to defined contribution schemes, higher and additional rate taxpayers in defined benefit schemes might see their and their employer’s contributions taxed as a benefit in kind, increasing their tax bills.”
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| Professional in Payroll, Pensions and Reward |
Issue 67 | February 2021
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