Equiniti is delighted that HMRC has now confirmed that all participants of SAYE schemes will benefit from an extended 12 month savings contribution ‘holiday’.
Following the announcement laid out in the 2017 Autumn Budget that participants could go 12 months without making a monthly contribution to their scheme rather than six, it has now been confirmed that the reforms will be extended and not just impact those on maternity and parental leave but all members of SAYE plans.
Graham Bull, Head of All Employee Share Plans at Equiniti, believes that the changes will bring about positive consequences, not just by increasing the appeal of SAYE plans, but also on saving habits by encouraging employees to stick with their contract even though they may need to take a break from saving.
Graham comments, “It is great news for employees that HMRC has extended this change to all SAYE participants, providing a simple and uniform approach. In addition, the reform will allow for greater flexibility, truly reflective of 21st century working practices, hopefully encouraging more employees to sign up to these tax-efficient plans. For those going through a tough period financially, starting to work more flexibly or simply wishing to funnel money away for a particular reason, the change will be very helpful, creating another behavioural nudge towards longer term saving.”
Implementation of the policy has been delayed from 6 April 2018 to 1 September 2018 in order to “allow for software changes and testing”, according to Mel Stride, Financial Secretary to the Treasury.
This is greatly welcomed by those involved in running SAYE plans as it provides more time to implement the relevant process changes. Graham agrees that an extension was needed though points out there is little downside to this delay as from 1 September 2018 the change will additionally benefit all participants including those in existing plans.
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Notes to Editor:
Equiniti is a specialist outsourcer delivering technology-enabled solutions to some of the best-known brands and public-sector organisations in the UK, including c.70 of the companies in the FTSE 100. It is the UK’s leading provider of share registration and associated investor services, and also has market leading positions in administration of employee share plans, pension administration and software, and employee benefit schemes. Equiniti’s services, which are delivered by over 4,300 employees, benefit 28 million people in the UK and 120 countries around the world.