New pension rules that come into force from June will require anyone that hires staff – even just one person like a personal carer or a nanny - to offer them a pension.
Under the government’s auto-enrolment scheme, all employees over the age of 22 earning more than 10,000 a year will have the right to a workplace pension, unless they opt-out.
“It affects anyone who has an employee – so you may have husbands writing to wives and vice versa. Once you hit the threshold of £10,000 a year or more you have financial obligations,” Fiona Tait, business development manager at Royal London Pensions, told the BBC.
Some 5.2 million workers in 45,000 companies have joined the scheme so far, according to the BBC. Between now and 2018, a further 3.8 million should have joined, representing 1.3 million employers.
Local authorities may be required to pay pensions for carers and the elderly – though many may not be prepared for the cost. Other carer employers have been caught off guard by warning letters.
Edward Graham, head of advice and information at the charity, Carers UK, told the BBC: “It's caused a very high degree of anxiety amongst many people who've received these letters.”
Nannies, who can earn much more than carers, may cost employers another £300 to £500 a year in pension contributions.
Cleaners and gardeners will not be affected, unless they get paid more than the £10,000 threshold a year.Reuse content