News

Philip Hammond’s Budget, announced on 29 October 2018, did not introduce any major unexpected changes to pensions.

The tax free allowance, the amount of income a person can receive before they begin to pay tax, will increase to £12,500 in April 2019.  The threshold for the higher rate of tax for England and Ireland will be £50,000.  Scotland and Wales have yet to publish the higher rate thresholds which will apply to taxpayers living there.

The Lifetime Allowance, the level of tax advantaged pension saving a person can accrue, will increase to £1,055,000 from April 2019.

The government has confirmed that they will shortly be implementing legislation to make pensions cold calling illegal, a measure which is intended to combat pension scams.

For more information on the Budget, please click here.

The new Coats UK Pension Scheme

As you may recall from the announcement in March, Coats Ltd (“the Company”) had asked the Trustees to agree to a merger of its three UK pension schemes – Brunel Holdings Pension Scheme, Coats Pension Plan and Staveley Industries Retirement Benefits Scheme – into a new pension scheme called the Coats UK Pension Scheme (“the new Coats Scheme”).

The Trustee agreed to the transfer and the assets and liabilities – including member benefits – of the Plan were transferred to the new Coats Scheme on 1 July 2018.

There is no change to the type and amount of member benefits as a result of the merger.

Contact details for your pensions administration team are unchanged – you can find them in the Contact Us section. In practice, members shouldn’t see anything change apart from the scheme name.

The Scheme will be looked after by a new Trustee Board which consists of representatives from each of the previous Trustee Boards, together with two independent trustees. The chairman of the new Trustee Board – Coats UK Pension Trustees Limited – is Chris Martin, and a welcome letter has been sent to all members of the new Scheme.

The new Coats Scheme is committed to protecting your personal data, and, in accordance with the General Data Protection Regulation (GDPR), a copy of the new Scheme’s privacy notice is available by clicking here.

Transfer of pension benefits in the Coats Pension Plan to a new Scheme.

Coats Ltd (“the Company”) is the sponsoring employer of Coats Pension Plan (“the Plan”). The Company is also the sponsoring employer of two other pension schemes in the UK – Brunel Holdings Pensions Scheme and Staveley Industries Retirement Benefits Scheme.

The Company has asked the Trustee of the Plan (“the Trustee”) to agree to the transfer of all benefits under the existing Plan into a new pension scheme called the Coats UK Pension Scheme (“the new Coats Scheme”).

The new Coats Scheme would be a consolidation (or merger) of all three of the UK pension arrangements into a single scheme.

It is proposed that Plan members’ pension benefits will be provided by a new scheme called the Coats UK Pension Scheme. This is planned to take effect on 1 July 2018.

This proposal does not change the level of pension entitlement members currently have in the Plan. Plan Members should receive a letter from the Company and Trustee Board with more information about this.

Please note: the Pensions team is likely to be very busy preparing to implement the system and data changes associated with this transfer, so there may be a delay to their normal timescales. Please bear with them during this exceptionally busy time, and please be assured that they will respond to all queries as quickly as possible.

Pensions News 38 and the Annual Funding Statement are now available.

In this Pensions News issue: Plan accounts summary, Data Protection and Cyber Security, Jargon buster and more.

View these documents online at our My Coats Pension site (you will need to register if it’s your first visit): https://secure.coatspensions.co.uk

You can also view them online in the member-only section (you will need the secure area password): click here

The Autumn Budget, announced on 22 November 2017, avoided any substantial changes to pensions.

The fear that the Chancellor was plotting a raid on pensions proved to be unfounded,with no changes to pensions tax relief. Indeed, there was very little in this Budget about pensions at all, but there are a few points you might be interested in.

State Pension
The basic state pension will rise by 3% in April 2018. Annual increases in the state pension are covered by the ‘triple lock guarantee’, which ensures that it rises each year by either September’s Consumer Prices Index (CPI) inflation figure, average wage growth or 2.5% – whichever is highest. This year, the CPI of 3% in September 2017 dictated the increase to the state pension.

Lifetime Allowance
The lifetime allowance for pension savings – the total value of pension benefits you can receive in your lifetime without having to pay a tax charge – will also increase in line with CPI, rising from £1 million to £1.03 million in April 2018.

Income tax
The personal allowance – the amount you can earn before you pay income tax – will rise from £11,500 to £11,850 in line with inflation in April 2018. The higher-rate tax threshold will also increase for people living in England, Wales and Northern Ireland, from £45,000 to £46,350.

Capital gains tax, savings and dividend taxes
No changes to capital gains tax or taxes on savings or dividends, and no changes to inheritance tax either.

For more information on the Budget, please click here.