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Mini budget pension implications

The jobs must be "decent jobs" granting employees a minimum of 25 hours of work per week, paid at the National Minimum Wage, set at £4.55 for those aged under 18, £6.45 for those aged between 18 to 20, and £8.20 for those aged between 21 and 24.

The government will also pay employer overhead costs, expected to include pension contributions.

Combined with auto-enrolment (AE) legislation, it means, when calculated as an annual salary of £10,660, the government is therefore expected to pay for employer contributions for employees aged over the age of 22 in the scheme.

The costs will be met by the government for six months. Due to the lower level of qualifying earnings of £6,240, this amounts to around £66.30 per employee at the basic minimum under the scheme. By paying the wages of staff, it will effectively also pay £110.50 of employee contributions.

The chancellor said the programme formed part of the second phase of the government's economic response to the coronavirus pandemic, a "plan for jobs" which will also see employers bringing back furloughed staff and employing them until at least the end of January 2021 paid a £1,000 bonus per employee.

The third phase of the response is expected in autumn with a budget and spending review.

FOR INVESTMENT ADVICE REGARDING YOUR PENSION OR OTHER INVESTMENTS PLEASE CONTACT Elliott Wilson ACSI DipPFS AF3

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