Pension reform could be good news for PAYE freelancers
Last Updated on 18 July 2024
Last week I wrote a blog post outlining a few things which the new Labour goverment looked likely to change.
The one I missed was pension reform.
In the King’s Speech today (17th July 2024) there is a pension schemes bill.
This wasn’t on my radar, and the FT described is as ‘a surprise’ too.
It looks likely to address one of the issues that comes up over and over again in my training courses.
What’s the current problem for freelancers?
PAYE freelancers (see here for a definition) are often auto-enrolled in different pension schemes as they move around from employer to employer.
In the UK you can’t demand that the employer use a specific pension scheme. They just put every employer in the same one.
This is tricky to keep track of. After a few years you might have up to 7 or 8 pension pots.
Of course it’s not just PAYE freelancers in this position. It’s also people in ‘normal’ continuing jobs.
The auto-enrollment scheme has been around for more than 10 years now. so thousands of non-freelancers are also finding they’re in multiple pensions schemes.
This wouldn’t be a problem if schemes performed identically, and if people could remember where their money was put. But 1) they don’t and 2) they often don’t!
At first glance the changes proposed under the new bill look very hopeful.
There’s a good outline of the plans here in the Guardian:
I’ll keep an eye on the legislation as it goes through and keep you updated.
NB: David Thomas Media Ltd is not responsible for the content of other sites nor any financial advice provided by them.
Posted on 17 July 2024
