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Pensions for Nannies - what do you think?

29 replies

ClaireZest · 26/02/2015 12:50

I posted a question to Rachel Reeves regarding Labour's proposals for workplace pensions for nannies. It's something I'm starting to come across more and more and I can see it becoming a real problem (ie higher costs and extra administration for the employers and less take home pay for the nannies).

Here's my question and how she answered:

ClaireZest:
"Could you please tell us what workplace pension provision Labour will propose for nannies and their employers?
I work closely with parents who employ nannies and a lot of them are concerned that employment costs will rise dramatically if the Automatic Enrolment workplace pensions regulations will continue to apply should we see a change in government."

Rachel Reeves:
"I think it is right that people who are working get access to workplace pensions and that people who employ people contribute to that. We legislated for it when we were previously in Government and it is being rolled out at the moment. By 2017 if you employ a nanny then you will pay towards their pension (the contribution is about 3% of their salary above the NI threshold). They will also pay in and they will get some tax relief as well."

I just wondered what the parents employing a nanny and the nannies among you think about this?

If you are considering employing a nanny for the first time, would you be put off with then having to set up a pension scheme for her/him too?

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TreadSoftlyOnMyDreams · 26/02/2015 14:07

I can't say that I'm jumping up and down about anything that increases the cost of employing a nanny to be honest but it's fair that they should receive a contribution towards one in the same way as any other job. If I had to personally set up an actual scheme then I would run a mile. I expect a nanny to sign up to a scheme and to also contribute before I would do so.

I do think that the government needs to treat nanny employers like any small employer though and offer the same discounted NI and SSP provisions. It is taking advantage the piss to pick and choose which areas to apply including pensions.

In any case, by the time it rolls around the tax provisions/allowances around childcare to replace childcare vouchers will just about cover NI and pension provision I expect, and possibly not even that much. I am very hopeful that I can manage without a FT nanny by then as it is crucifying us.

nannynick · 26/02/2015 14:00

Yes, I have two plans already, only one actively paying into. I just wonder if it's better to pay into an existing one, or to start a new one?

I agree that nannies should not be any different to other workers but what will be the impact on salaries?

bbcessex · 26/02/2015 13:48

I think it's reasonable to expect all employers to contribute an element toward their employee's pension, therefore being a nanny employer shouldn't make a difference to that.

I would like to see a sliding scale of the minimum amount based on the size of the company. To be honest, 3% seems to me to be a reasonable amount as the minimum.. much less and it wouldn't be worthwhile doing. As an employer, you could also contribute more if you wished, which would be a good incentive to keep a good nanny. I wouldn't (by choice) join a company that didn't offer a good contributory pension scheme so I don't see why nannies should be any different.

Nannynick; I have several pension plans from different companies over the years, so I think its probably quite usual to have more than one.

nannynick · 26/02/2015 13:40

3%, I thought it was less than that initially.

I feel it is good to encourage everyone to pay onto a pension. However what will happen to those of us who already do, will we then have multiple pension plans?

Employers contributing towards a pension is great, from a nannies point of view but it is an added cost from a parents point of view. Not sure employers should be forced to pay into their employees pension.

NEST will provide the pension scheme for small employers, so no huge costs involved in admin terms at the look of it. Not sure how the charges (which are deducted from the pension pot) compare with other schemes, 0.3% annual plus 1.8% of each contribution.

Would like to see more effort going into the employment status of nannies. Rachel did answer my question on that topic but will they really be able to clamp down on bogus self employment? Will employers having to contribute to pensions just make bogus self employment happen even more?

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