Was the slaying of POAL a ruse to save £5 million on employer pension contributions & NI via ALU?

[sindba]

No-one will be able to take unpaid leave to replace POAL ffs.

"Sorry, operational needs". I mean, you might manage an odd day here or there, but not when you really want it, can't be guaranteed in advance, cancelled at short notice.

How long since Union leaders actually worked in the floor reality? Clueless.

[2chorizon]

Seen some updated figures being posted elsewhere:

pension contributions 13.9% + 1% if you opted for rhe booster (for the lump sum) £100 per wk per opg.

Now, revised figures suggest that the savings could be up to £10 million by forcing just 50,000 into ALU

This is a very conservative estimate as the figure of uptake for ALU (given its free) is likely to be nearer 100,000.

I rest my case my learned friend.

[loyalsnail]

If people take unpaid annual leave they will save about £14 in pension contribution for every full-time day taken.

The NI saving will be negligible as they would have saved that under the old scheme except it would have been spread out over the whole year rather than it being applied in specific weeks per person.

Is the restrictions on the purchase of annual leave a ruse to save on those things? No, it's complying with employment law.

An employee on £500 per week who purchases a week's leave would forgo 2% of their pay throughout the year, so would receive £490 per week for 52 weeks of the year. Each week their National insurance record would be:

Employer’s NICs due = £59.10
Employee’s NICs due = £19.84

On that basis, annual earnings and NIC would be:

Annual Earnings : £25,480
Employer’s NICs due = £3,073.20
Employee’s NICs due = £1,031.68

-----

An employee on £500 per week who took a week's ALU would forgo 100% of one weeks pay, so would receive £500 per week for 51 weeks of the year. Each week their National insurance record would be:

Employer’s NICs due = £60.60
Employee’s NICs due = £20.64

On that basis, annual earnings and NIC would be:

Annual Earnings : £25,500
Employer’s NICs due = £3,090.60
Employee’s NICs due = £1,052.64

-----

That being the case, ALU would actually cost you £20.96 of additional national insurance contributions whilst increasing your gross pay by £20.

The business would pay an extra £17.40 of NIC whilst paying you £20 more.

IN CONCLUSION: ALU would be broadly net neutral to you as the employee and net negative for Royal Mail... Yet conspiracy theorists throw out numbers that don't have any critical thinking behind them.


For charity: I edited as I got my figures the wrong way around and said it was net positive when it isn't

[loyalsnail]

Seen some updated figures being posted elsewhere:

pension contributions 13.9% + 1% if you opted for rhe booster (for the lump sum) £100 per wk per opg.

Now, revised figures suggest that the savings could be up to £10 million by forcing just 50,000 into ALU

This is a very conservative estimate as the figure of uptake for ALU (given its free) is likely to be nearer 100,000.

I rest my case my learned friend.

Nonsense, see my post.

Don't believe everything you read on the internet (unless I've posted it).

[tramssirhc]

If people take unpaid annual leave they will save about £14 in pension contribution for every full-time day taken.

The NI saving will be negligible as they would have saved that under the old scheme except it would have been spread out over the whole year rather than it being applied in specific weeks per person.

Is the restrictions on the purchase of annual leave a ruse to save on those things? No, it's complying with employment law.

An employee on £500 per week who purchases a week's leave would forgo 2% of their pay throughout the year, so would receive £490 per week for 52 weeks of the year. Each week their National insurance record would be:

Employer’s NICs due = £59.10
Employee’s NICs due = £19.84

On that basis, annual earnings and NIC would be:

Annual Earnings : £25,480
Employer’s NICs due = £3,073.20
Employee’s NICs due = £1,031.68

-----

An employee on £500 per week who took a week's ALU would forgo 100% of one weeks pay, so would receive £500 per week for 51 weeks of the year. Each week their National insurance record would be:

Employer’s NICs due = £60.60
Employee’s NICs due = £20.64

On that basis, annual earnings and NIC would be:

Annual Earnings : £25,500
Employer’s NICs due = £3,090.60
Employee’s NICs due = £1,052.64

-----

That being the case, ALU would actually save you £20.96 of national insurance contributions whilst increasing your gross pay by £20.

The business would save £17.40 of NIC whilst paying you £20 more.

IN CONCLUSION: ALU would be net beneficial to you as the employee whilst being net negative for Royal Mail... Yet conspiracy theorists throw out numbers that don't have any critical thinking behind them.

And what about your class 1 contributions?

[loyalsnail]

If people take unpaid annual leave they will save about £14 in pension contribution for every full-time day taken.

The NI saving will be negligible as they would have saved that under the old scheme except it would have been spread out over the whole year rather than it being applied in specific weeks per person.

Is the restrictions on the purchase of annual leave a ruse to save on those things? No, it's complying with employment law.

An employee on £500 per week who purchases a week's leave would forgo 2% of their pay throughout the year, so would receive £490 per week for 52 weeks of the year. Each week their National insurance record would be:

Employer’s NICs due = £59.10
Employee’s NICs due = £19.84

On that basis, annual earnings and NIC would be:

Annual Earnings : £25,480
Employer’s NICs due = £3,073.20
Employee’s NICs due = £1,031.68

-----

An employee on £500 per week who took a week's ALU would forgo 100% of one weeks pay, so would receive £500 per week for 51 weeks of the year. Each week their National insurance record would be:

Employer’s NICs due = £60.60
Employee’s NICs due = £20.64

On that basis, annual earnings and NIC would be:

Annual Earnings : £25,500
Employer’s NICs due = £3,090.60
Employee’s NICs due = £1,052.64

-----

That being the case, ALU would actually save you £20.96 of national insurance contributions whilst increasing your gross pay by £20.

The business would save £17.40 of NIC whilst paying you £20 more.

IN CONCLUSION: ALU would be net beneficial to you as the employee whilst being net negative for Royal Mail... Yet conspiracy theorists throw out numbers that don't have any critical thinking behind them.

And what about your class 1 contributions?

That's what the illustration is

[abuch1980]

Interesting debate. Depending on the outcome , if you are taking ALU then be prepared.

[Playmail]

Salary sacrifice changes could hit millions more Britons, pensions expert says | Money News | Sky News https://share.google/mfIAbhtCgs0QQDJTz

[loyalsnail]

Salary sacrifice changes could hit millions more Britons, pensions expert says | Money News | Sky News https://share.google/mfIAbhtCgs0QQDJTz

My heart doesn't bleed for people putting £2k in a pension

[Perseus]

Salary sacrifice changes could hit millions more Britons, pensions expert says | Money News | Sky News https://share.google/mfIAbhtCgs0QQDJTz

My heart doesn't bleed for people putting £2k in a pension

Many posties pay around that number, I'd imagine you'd only need an AVC of 2-3% to go above £2k currently.

[loyalsnail]

Salary sacrifice changes could hit millions more Britons, pensions expert says | Money News | Sky News https://share.google/mfIAbhtCgs0QQDJTz

My heart doesn't bleed for people putting £2k in a pension

Many posties pay around that number, I'd imagine you'd only need an AVC of 2-3% to go above £2k currently.

I pay way more than £2k into my pension, but if I can do that then I can pay a bit of NI on my contributions if it helps society in some way.

[loyalsnail]

Salary sacrifice changes could hit millions more Britons, pensions expert says | Money News | Sky News https://share.google/mfIAbhtCgs0QQDJTz

My heart doesn't bleed for people putting £2k in a pension

Many posties pay around that number, I'd imagine you'd only need an AVC of 2-3% to go above £2k currently.

On reflection, your point is a good one - £2k is far too low. £6k would be a better point to start paying NI at. £500 per month into pension is a better indicator of someone who could pay a bit of additional NI without feeling it too much, in broad brush terms at least.

[Perseus]

Salary sacrifice changes could hit millions more Britons, pensions expert says | Money News | Sky News https://share.google/mfIAbhtCgs0QQDJTz

My heart doesn't bleed for people putting £2k in a pension

Many posties pay around that number, I'd imagine you'd only need an AVC of 2-3% to go above £2k currently.

I pay way more than £2k into my pension, but if I can do that then I can pay a bit of NI on my contributions if it helps society in some way.

But you are happy to get penalised for going over the £2k?
I agree, not everyone can afford to pay over £2k a year, but people paying say, £3k aren’t likely to be in very high paid jobs either.
You’ve also got to wonder whether companies like RM would be happy for salary sacrifices to continue over the £2k as they then also get hit with NI payments for them.

[Barnacle]

I had no idea so many were paying for extra holiday until this POAL nonsense

[loyalsnail]

Salary sacrifice changes could hit millions more Britons, pensions expert says | Money News | Sky News https://share.google/mfIAbhtCgs0QQDJTz

My heart doesn't bleed for people putting £2k in a pension

Many posties pay around that number, I'd imagine you'd only need an AVC of 2-3% to go above £2k currently.

I pay way more than £2k into my pension, but if I can do that then I can pay a bit of NI on my contributions if it helps society in some way.

But you are happy to get penalised for going over the £2k?
I agree, not everyone can afford to pay over £2k a year, but people paying say, £3k aren’t likely to be in very high paid jobs either.
You’ve also got to wonder whether companies like RM would be happy for salary sacrifices to continue over the £2k as they then also get hit with NI payments for them.

No, you're right, see my follow up post just before yours - £2k is too low and it should absolutely be higher.

I'm personally happy to get penalised for going over £2k because the me of today can afford to do it for the benefit of the me of tomorrow (mortgage paid off so previous mortgage payments straight into an AVC before I get used to the extra income). Plenty of people will, as you rightly point out, be more than capable of paying in more than £2k per annum at the expense of the them of today in fear of what's in store for the them of tomorrow. People in that scenario might very well be going without in order to secure their future, and to raid them for extra NI isn't a great look.

As with any government policy, its a fine balancing act with a spectrum of people affected, but £2k will catch far too many people at the wrong end of the spectrum - the personal allowance is still set at £60k per annum... someone who can afford to have annual pension contributions of £60k, year in year out (they can supplement their allowance by leaning on unused allowance from the previous three years), is a far better target for additional NI charges on contributions, and there are enough of them that the government shouldn't need to impinge on the pension savings of people putting in £2k.