What We Do In Reality

Here at Richmond House, we write blogs. Largely, they are on topical issues that consider the bigger picture. They offer opinions and insights into rule changes, new laws, changing demographics etc. And, hopefully, you find them all good. But what do we actually do?

Well, now it’s time to set the record straight.

We have recently taken on a new client who, to date, have been using a specialist Employee Benefits consultancy. They have paid many tens of thousands of pounds although, much of the time, they didn’t really know what for.

As part of our service, we did a market exercise on all their benefits. First up, we were able to save them nearly £5,000 a year on the cost of their Group Life Assurance (as well as updating the eligibility criteria to note that employees no longer worked at the address on the policy which the employer had moved from 3 years previously!).

Then we looked at the pension. The statistics were simple – just over 150 members, nearly £60,000 a month of contributions and £2.5M accumulated in members’ plans. The existing provider had set up their scheme a few years ago and was charging the maximum allowable under an Automatic Enrolment scheme of 0.75% of each member’s fund value per annum.

On the face of it, this to us looks like a quality scheme. High average contributions. A relatively young workforce. Low staff turnover. And quite a bit of money in the pot already. Frankly, 0.75% seemed a bit on the high side but no-one had looked before (or even suggested looking) to see if this continued to be a good deal for the pension scheme members.

Keen to ensure employees were getting the best value for money, but mindful of the destabilising effect that moving a pension scheme can have (not forgetting simple courtesy), we went back to the existing provider after we had conducted our market exercise. After some prevarication, they agreed to move the annual charge to 0.57%. However, as we could get everyone a new scheme with a charge of 0.46% reducing to 0.285% for a fund of £100,000 and going even lower to 0.12% on a fund of £500,000, it became a “no brainer” to move the scheme entirely, reducing charges markedly and adding additional benefits along the way.

Percentages are all well and good but what does that all mean in money terms? Well, someone with £30,000 in their fund would save a princely £33 a year. A member with £100,000 would save £285 a year and the anyone with £500,000 will save £2,300 a year. This is money that will be retained in the pot and be available for retirement.

On top of this, we are introducing the Richmond House Corporate Service Employee Portal giving employees access to a wide range of other services including legal, accountancy, financial planning funeral plans and mortgage services. And all this at a cost to the employer of around half of what they were paying before.

Add to this the fact that we are introducing Salary Exchange which will actually produce more in NI savings for the employer than we are being paid in fees annually.

And we’re doing presentations and 1-1 meetings to explain all the changes to employees.

So, that is what we do. And, although it sounds smug to say, we do it pretty damn well!

If you’d like to consider something similar for your business, get in touch with us on 0333 241 3350.