Chancellor Philip Hammond delivered the Autumn Budget 2018 on Monday, 29 October, but there was not a great deal in it affecting employee benefits and reward, despite much speculation about what might be announced regarding pensions.
What was welcomed by the pensions industry was the revelation that the government will provide an additional £5 million in funding in 2019-2020 to help bring the pensions dashboard to fruition, followed by a consultation later this year on its detailed design.
The government’s announcement that it will shortly be implementing legislation to make pensions cold calling illegal was equally well received. A response to its consultation on pensions cold calling to help protect pension members from pension fraud is also due to be published, and whether this is successful in protecting people from pension scammers is yet to be seen. In any case, few would not agree that any action taken should go hand in hand with a campaign to raise awareness on the issue.
Perhaps the most interesting aspect of the Budget 2018 from a pay perspective is that, from April 2019, the tax-free personal allowance will increase from £11,850 to £12,500, while the higher-rate tax threshold of 40% will also rise from £46,351 to £50,000. Both thresholds will remain at the same level throughout 2020 and 2021, and then increase in line with the Consumer Price Index.
Also from April 2019, the national living wage will rise to £8.21 an hour for employees aged 25 and over. Although this has been described as a real wage boost for the UK’s lowest earners, it will be interesting to see if employers are equally welcoming of the higher rate of pay. No doubt many will have to consider how they intend to offset the additional costs.
The decision to increase pay rates could also have an impact on gig economy workers. For this reason, although the Budget 2018 has dominated the headlines this week, the two-day strike action carried out in response to transportation organisation Uber challenging the result of its employment status case at the Court of Appeal cannot be overlooked. The case of Aslam and Farrar v Uber centres around whether the drivers concerned should be considered workers or independent contractors, which will affect their entitlements to benefits such as holiday pay.
The rights of gig economy workers and how they should be classified is a hotly contested issue, and one which is clearly going to continue to be debated for months, if not years, to come.