Share
Print
Print Share

Press comment: £333 annual pension boost as living wage rise announced

30/09/2019

If you are covering the news that the Conservative party has announce the national living wage will increase to £10.50 within five years, please see below commentary from Jon Greer, head of retirement policy at Quilter:

Jon Greer“The Chancellor’s announcement that the hourly rate of the national living wage will increase to £10.50 within the next five years will feel like a significant step in the right direction for many receiving this wage. However, what they may not realise is this pay rise will also bring with it benefits for their retirement, as thanks to auto-enrolment these workers will also see their pensions contributions rise. Not only will they be putting more money away for retirement, but it also means their employers and the government, in the shape of tax relief, will top these contributions up by more too. This could result in an extra £333.44* each year being saved for retirement by someone on the national living wage at its new rate. This is a fairly substantial increase and shows, along with the power of long-term investing, that pensions continue to serve an essential purpose in today’s society.  

“It is up to the government and the industry now to keep banging the drum for pensions. The government has done an admirable job so far in highlighting the benefits of auto-enrolment and it is crucial that it continues its campaign to increase the visibility of pensions and ensure this new generation engage as early as possible to help eliminate any negative feelings towards saving for retirement.”

* Based on a 35 hour week and holiday pay, the annual earnings of someone today on the national living wage is £14,942.20 (£8.21 x 35 x52). If national living wage increases to £10.50 that annual earnings figure increases to £19,110

 

Assuming

1. contributions are paid on qualifying earnings (earnings less lower earnings threshold £6,136)

2. employee: 5.0%, employer: 3.0%

 

On earnings of £14,942

employee annual contribution £440.30

(includes tax relief of £88.06)

Employer's annual contribution £264.18

Total annual contributions £704.48

 

On earnings of £19,110

employee annual contribution £648.70

(includes tax relief of £129.74)

Employer's annual contribution £389.22

Total annual contributions £1,037.92

 

Difference in total contribution £333.44

For more information contact

Gregor Davidson020 7002 716407917 522784gregor.davidson@quilter.com
Tim Skelton-Smith02380 916 99807824 145 076tim.skelton-smith@quilter.com

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.7 billion in investments (as at 30 September 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.