A Private Members’ Bill to help millions save more into their pension and start saving sooner has cleared Parliament and been granted Royal Assent. The changes reduce the minimum age for being automatically enrolled into a pension from 22 to 18 and remove the lower qualifying earnings threshold to enable pension saving from the first pound of earnings.

Auto-enrolment was designed to get more people saving for their retirement, meaning all employers must provide a workplace pension scheme for employees.

As things stand, the current criteria for an employer being required to automatically enrol an employee into a pension is:

• They’re classed as a ‘worker’
• They’re aged between 22 and State Pension age
• They earn at least £10,000 per year
• They usually work in the UK

For workers who do not meet the above criteria, it is still possible to request to join an employer’s pension scheme, however, an employer doesn’t currently need to contribute to an employee’s pension on earnings at or below:

• £120 per week
• £480 over 4 weeks
• £520 per month

The new laws will reduce the minimum age from 22 to 18, which will result in a huge difference to the retirement pots of young people. It is estimated that an additional 4 years of funding for an 18 year old could increase their pension pot by over £45,000.

These changes will also mean that all workers will be entitled to employer contributions and for those with earnings above £10,000, it is expected that they will eventually receive an additional £500 pa in total pension contributions.

The new measures are projected to raise total pension contributions by c£2billion each tax year.

The Department for Work and Pensions (DWP) has yet to comment on the timescales to implement these changes and is expected to launch a consultation on the plans. Despite the benefits to workers, this may have an adverse effect on businesses as costs will increase.

Funding for retirement is one of the most important objectives for most of our clients. If you would like to speak to a member of our team about the above, please do not hesitate to get in touch.

Eldon welcomed Ellie Boylan as a new addition to the administration team last Monday.

Below is a short introduction from Ellie:

“Upon leaving school in 2020, earlier than expected due to the COVID-19 pandemic, I decided my goal was to pursue a career in Financial Services. I secured an apprenticeship at a wealth management company in Financial Service Administration, achieving a distinction in 2021. Following this, I completed a further eight Chartered Insurance Institute (CII) vocational qualifications.

I have joined Eldon as a technical administrator with the plan to further my professional and personal development at a successful firm that puts clients first. I am eager to continue my studies with the hope of achieving my Diploma in Regulated Financial Planning!

Outside of work I enjoy travelling with my friends and family and attending music events around the UK.”

Ellie is an excellent addition to the team, and we can’t wait to see her achieve her goals and succeed with Eldon.

Paraplanner Tom has now gained his Diploma in Financial Planning.

Tom started his studies when he first joined Eldon in November 2021, gaining the Diploma in just under 2 years. Considering he has become a father and a husband in that time too, this is a fantastic achievement!

Tom is now working towards the Advanced Diploma in Financial Planning, with a view to achieving Chartered Status.

Well done, Tom, keep up the good work!

With Artificial Intelligence (AI) seemingly in the news every day, it is no surprise that developments in this area are under scrutiny. Ernst & Young partner, Saby Roy, quoted that ‘the entire world is in a discovery phase right now’, with every industry looking to branch out into AI technology in some way or another.

The financial services sector is no exception, whether it’s the use of ‘chatbots’ for consumers’ online questions, or its use to detect money laundering and potential fraud. According to UK Finance, fraud cost the UK £1.2 bn in 2022. Institutions such as Mastercard and TSB are in the process of trialling a new system designed to detect fraudulent transactions on the Faster Payments network within milliseconds. TSB have estimated that the technology could reduce push payment fraud (scam payments) by around 20%. Once established among larger players in the market, developments will likely spread more quickly to smaller institutions.

Whilst the potential benefits are becoming clearer, there are always downsides to consider. Some experts within the sector have raised concerns of the misuse of technology to make criminal transactions more effective. Earlier iterations of automated tools have also faced scrutiny over inaccurate results, with some wrongful arrests in the US following poor facial recognition technology.

Understandably, some also worry that advancing AI could push workers out of the employment pool. BT recently announced plans to lean-out its workforce between now and 2030, as they look to replace around 10,000 employees with AI.

However, history suggests that technological development will typically create jobs that no one can predict, or even understand. When we consider the role of the blacksmith in historic horse travel, it is unlikely that anyone could have foreseen the boom in car travel and, with it, car factory workers. According to the US Bureau for Labour Statistics, there were 6 times as many car factory workers than blacksmiths by 1950. Similar trends can be seen amongst train drivers Vs pilots, farmers Vs supermarket workers, and so on. Perhaps it is better to look ahead with the optimism of the car factory worker, as opposed to the pessimism of the blacksmith, or perhaps a healthy combination of both.

Overall, like most technological advances, it is likely that governance will be crucial in moving forwards with AI, ensuring that the benefits are monitored in line with the consequences, intended or otherwise.

In June, The Office for National Statistics (ONS) announced the Consumer Prices Index (CPI) rose by 7.9% compared to the previous year. This is down from 8.7% in May which reflects a ‘slowdown’ in the annual rate between May and June.

As inflation is beginning to slow, it is expected that future increases to UK interest rates will also ease. Currently the official Bank of England Base Rate is 5.00% which is the highest it has been since April 2008, during the global financial crisis.

At present, the most competitive easy access accounts are offering c4.50% gross AER. Therefore, by holding £10,000 in one of these accounts, you could be expected to receive c£450 per annum in savings interest.  With increasing interest rates, it is now more important to ensure your savings are held in the most tax efficient manner.

If you would like to speak to a member of our team about interest rates and ensuring funds are held in a competitive tax efficient cash account, please do not hesitate to get in touch.

Gemma’s been out and about recently at the local St Francis Junior school in Newton Aycliffe as part of their brilliant Believe & Achieve Day. The day was a huge success for all and saw Gemma talking with students about Financial Planning as a career option, skills needed, pathways into it, and her own career path.

Very well done to all the staff at St Francis Junior School for organising an excellent day for their students. Even more so, a HUGE thank you to all the students who had researched Eldon and the jobs we provide and asked lots of inspired and fun questions about these. It was a very relaxed and fun day and lovely to share stories with so many bright young people! The future is bright in the hands of these ones!

We are extremely proud of our ‘skydiving team’ who successfully completed their 15,000ft skydives at Shotton Airfield on the morning of Sunday 25^th June.

A huge thank you to the team at SkyHigh Skydiving who kept them all safe and to each and every one of you who has sponsored them. Eldon will be matching their fundraising, as will an anonymous donor, which means they have raised in excess of £5,000 for the County Durham Poverty Hurts Appeal.

The money is actively being deployed across County Durham now to help combat poverty at a time when it is so very needed.

If you would like to read more (or see more pictures) their website is: https://cdcf.enthuse.com/pf/skydive

BRAVO JAMES, JENNY, KENNY & GEMMA! We are proud of you all.

Individuals wishing to maximise their State Pension entitlement are able to purchase credit for missing years by making voluntary class 3 National Insurance (NI) contributions and the government is now giving people more time to make these contributions.

When the ‘new’ State Pension was introduced, transitional arrangements were put in place to allow people to go back all the way to 2006 to purchase any missing years. Originally, there was a deadline set of 5^th April 2023 to purchase these historic years, however, following capacity problems on government helplines, this was pushed back to 31^st July 2023. This deadline has now been pushed back further to 5^th April 2025 to allow individuals to purchase any missing years from 6^th April 2006.

Individuals can usually only pay voluntary NI contributions for the previous six tax years and after 5^th April 2025, the usual six year deadline will resume.

In addition to extending the deadline, the cost of paying voluntary NI contributions for years between 6^th April 2016 and 5^th April 2023 will remain frozen until 5^th April 2025.

How do I check if this will benefit me?

Filling in any gaps in your NI record by paying for voluntary NI can be money very well spent, but not everyone with an incomplete NI record will benefit by doing so. which is why it’s so important to obtain a State Pension forecast from Department for Work & Pensions (DWP) in the first instance.

Once you’ve determined that you have a shortfall, and these gaps are not going to be filled naturally through employment or other means, you should call the Government’s pension helpline to discuss your record and how to make payment. You can find contact details at: https://www.gov.uk/future-pension-centre

Whilst the cost of one full year’s class 3 NI is c£824 (2022/23 rate), this would see your State Pension increase by £302.86 pa. At this level, it would take around 3 years of the State Pension being in payment to ‘break even’ on the cost contribution. It would take a little longer if you’re a basic rate, higher rate, or additional rate taxpayer, however. But this is still a very good deal, given the average life expectancy.

We check State Pension entitlement for our clients as part of our service. If you would like to discuss this further with the team, please do not hesitate to get in touch.

HMRC has recently highlighted that more than 800,000 taxpayers claimed tax refunds for work expenses during the 2021/22 tax year and is reminding employed workers that they can claim tax refunds on work-related expenses that are not reimbursed by their employer through the GOV.UK website.

You can submit a claim through HMRC’s online portal, and it is suggested that it takes around 15 minutes. There is also a handy online tool available which allows you to check the eligibility of the claim before submitting it, together with guidance on the types of expenses that can be claimed.

These include:

• Uniforms and work clothing
• Buying work-related equipment
• Professional fees, union memberships and subscriptions
• Using your own vehicle for work travel (excluding journeys from work to home)

If you don’t already have a Government Gateway account, you will need to register for one before being able to submit a claim. Again, this is a free service, and it is quick and easy to set up with step-by-step guidance available on the GOV.UK website.

If you need assistance with claiming work-related expenses, you can use the services of an accountant. Please do not hesitate to contact Eldon if you have any queries or need help finding an accountant.

Ofgem, the energy regulator, announced a reduction to the Energy Price Cap on Thursday, which is set to see a long-awaited drop in energy bills for millions of households across the UK. The new limit will come into effect from July, to be reviewed every quarter thereafter.

The Price Cap limits the amount that suppliers can charge for their standard variable tariffs (SVTs), the default deals that individuals are switched to after their fixed or variable tariffs end. In the midst of the energy crisis, most households are now on SVTs, with almost no suppliers currently offering fixed deals.

As the Cap was forecast to exceed £3,000, the Government introduced the Energy Price Guarantee (EPG) last Autumn. This measure froze the unit cost of gas and electricity so that the average household would pay around £2,500 pa.

However, the reduction in the Cap means that it is now lower than the Government’s Guarantee, down from £3,280 to £2,074. As a result, the average household will pay roughly 17% less than they are currently paying under the Guarantee.

For the first time in 18 months, energy prices are beginning to fall for those on SVTs. It is important to note, however, that this isn’t the maximum that you will pay, but the limit on the unit rate that can be charged for the energy you use.

Return of Fixed Rates?

Given the reduction in wholesale energy costs, which appear to now be being slowly passed to the consumer, we may see suppliers begin to offer fixed tariffs again. Tying into a fixed deal can be a good way to keep energy bills at an affordable level. However, the risk is that you fix your tariff and then the standard rate decreases, meaning that you are tied in at the higher cost for the remainder of the term.

If/when fixed deals return to the market, deciding whether to tie in will likely be a gamble, as we don’t know for certain which way prices will go over the coming year. Either way, the latest Cap reduction is a welcome step in the right direction.

As always, if you have any questions on the above, please feel free to contact a member of the team.