Govt launches pension campaign

Thursday 12 November 2015

The launch of a major Department for Work and Pensions (DWP) advertising campaign to highlight the importance of workplace pensions could be a welcome reminder for freelancers and contractors, who also need to make sure that they have plans in place for their retirement.

The advertisements are focused around a large furry monster called Workie, who is shown visiting all kinds of workplaces around the country, asking people not to ignore him.

The character is partly the brainchild of pensions minister Baroness Altmann, and comes with an accompanying hashtag: #DontIgnoreIt. The campaign will feature PR efforts and social media outreach, along with television, radio and print advertisements. Thus far, the advertisements have shown Workie struggling to catch people’s attention, but this may all change in his future outings.

British workers are expected to save around £15 billion through their workplace pensions over the coming five years, a figure that has been revised upwards from the original £11 billion figure.

Launching the campaign in Piccadilly Circus, Baroness Altmann said: “We have made great strides forward by automatically enrolling more than five million people into a workplace pension - now the challenge is to make sure hardworking people with every type of employer get to enjoy this major financial benefit.

“This is a fun and quirky campaign but behind it lies a very serious message. We need everyone to know they are entitled to a workplace pension - and we need all employers to understand their legal responsibility to their staff, but also to feel more positive about engaging with workplace pensions.”

While the main part of the campaign is aimed at ensuring that small businesses are offering the right pension plan for their employees, it is also a reminder that pensions are important for all the workers of Britain, including contractors.

There are a number of options for self-employed workers when it comes to pension planning, but they are now eligible to join the National Employment Savings Trust (Nest), which was set up by the government to help companies that did not have their own pension scheme in place.

Of course, being your own boss means that there is no employer to match your contributions, but the government is able to step into the role, offering tax relief to those who pay into the pension scheme.

The amount of tax relief which the government adds to your pension fund is 20 per cent for those who pay the basic rate of tax, and 40 per cent for those who are on the higher rate. The government will provide tax relief for annual contributions of up to £40,000, but it is possible to carry over any of this allocation that has not been used over the last three year.

It also allows you to raise or lower the amount that you pay into the fund, which can be useful for contractors who experience busy periods, or those who might want to use more of their earned income for a short period.

By Victoria McDonnell

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