PIXIE PAYROLL Blog

There’s been quite a lot in the news recently about pension credits, especially in connection with the changes in winter fuel payments. So, this month, our blog is all about these benefits and a look at who can claim them.

What are Pension Credits?

Pension Credits is a benefit for people over state pension age, i.e. 66 years and should top up the income of those who only have a small pension. It comes in two parts:

1. Guarantee Credit – This tops up the weekly income to a minimum level. For 2025/26, that’s £227.10 per week for a single person and £346.60 for couples.
2. Savings Credit – This is an extra payment for people who saved some money towards their retirement, such as through a workplace pension. However, it’s only available to those who reached State Pension age before 6 April 2016.

There may be further income available to those with a disability, other responsibilities such as caring or childcare or with additional costs such as some housing costs. The claimants do not need to have paid national insurance to receive the benefit and it is paid tax-free. Claimants can have up to £10,000 in savings and still be entitled to pension credits

Can employees claim Pension Credits?

This is where this benefit could be of interest to employers or those managing a payroll scheme – the answer is yes.

If the total of all income comes below the minimum amount, then the employee can still claim pension credits. The amount someone earns is taken into account but the first £5 for single people and the first £10 of joint earnings for couples is ignored in most cases.

Other reasons to claim Pension Credits

Pension credits in their own right can bring in vital additional income to pensioners who otherwise would be on a very low fixed income. But successfully claiming pension credits can unlock a number of other benefits. Until 2023, cold weather payments were made to all pensioners regardless of income and were not means tested. This changed last year when the payments were limited to those claiming pension credits although there is some suggestion this may change again.

Other benefits unlocked by pension credits include:

• Free TV Licence (if you’re over 75)
• A Council Tax discount
• Help with NHS costs such as prescriptions, dental costs, and transport for hospital appointments
• Help with housing costs such as housing benefit and mortgage interest support
• Help with heating costs through the Warm Home Discount Scheme

Applying for Pension Credit

Making an application for pension credit is straightforward via the government website, by phone or in writing by completing the claim form.

If an employee is only working a few hours a week, or has a low pension income, it would be worth checking on eligibility as it could make a real difference to the amount of money they receive. We would also encourage employers to ensure their qualifying employees have information on pension credits.

We’re now in that great time of year when bank holidays seem to come thick and fast. We’ve just had two days for Easter, and they will be rapidly followed by May Day and then a couple of weeks later, the late May bank holiday at Whitsun. So, it got us thinking – when did bank holidays start and how long have workers been enjoying them?

Origin of bank holidays

The idea of bank holidays first came from Sir John Lubbock who thought that a day when financial institutions closed would enable workers to enjoy more leisure time. The Bank Holidays Act was passed in 1871 which allowed for holidays on Easter Monday, Whit Monday in May, the first Monday in August and Boxing Day. At this time, it was only the banks that were allowed to close – which is why they’re called Bank Holidays – but fairly soon, other businesses and schools started to mark the public holidays too.

But workers were marking key dates in the calendar with holidays long before 1871. May Day in particular has many customs that go back thousands of years – the Celtic festival of Beltane celebrated the end of winter and the start of summer when fires were lit and people danced around the may pole, and many of those traditions continue today.

Modern Bank Holidays

The number of bank holidays in the UK has grown slightly since the original 1871 Act and the official public holidays are now:

• New Year’s Day
• Good Friday
• Easter Monday
• May Day (first Monday in May)
• Whitsun or Late Spring Bank Holiday (last Monday in May)
• Late August Bank Holiday (England, Wales and Northern Ireland only)
• Christmas Day
• Boxing Day

In Scotland, there is also an additional bank holiday on 2^nd January and for St Andrew’s Day at the end of November. In addition, the August bank holiday is on the first Monday in August and not the last.

Other one-off bank holidays can be granted by Royal Proclamation such as the ones we enjoyed for the Jubilee and for the 75^th anniversary of VE Day in 2020.

It is worth pointing out though, that employers can include bank holidays in an employee’s statutory leave entitlement and employers are not legally required to give bank holidays as paid leave so a day off on a bank holiday isn’t guaranteed.

Patron Saint days

As mentioned above, Scotland has a bank holiday for their patron saint St Andrew in November. Northern Ireland also has the day off to celebrate St Patrick’s Day in March but the other home nation saints – St David in Wales and St George in England – don’t have the same although there is regular discussion about introducing them.

Here in Cornwall, we celebrate St Piran’s Day on 5^th March and each year, the Council and Government is urged to recognise that special day by granting a bank holiday in Cornwall, so far without much success! We hope you all enjoy the next bank holiday and as always, if you need any help preparing your payroll or advice on statutory leave for your employees, get in touch.

Our regular blog readers will know that we always write a post after the big government financial events, which tend to happen twice a year. The main Budget is in the autumn and at this time of year, it’s the Spring Statement. This statement doesn’t often bring with it any major changes to payroll-related measures and this time is no exception. Any changes, such as the increase in employers’ national insurance, were announced last autumn and you can find the blog about that here.

National Living and National Minimum Wage

The Chancellor confirmed in the Statement that the National Living Wage and National Minimum Wage will be increasing from next week. The National Living Wage (NLW) will rise by 6.7% to £12.21 per hour and the National Minimum Wage will increase to £10 per hour. This increase translates to an approximate annual pay rise of £1,400 for full time workers on NLW.

Welfare and Benefits

With the economy still not performing as well as hoped and with the growth forecast for this year lowered again, the Chancellor announced further cuts to some welfare benefits such as a freeze in health-related universal credit for new claimants and a slightly reduced reduction in the universal credit allowance.

The changes to the eligibility criteria for personal independence payments were announced last week and as Pip can be claimed by working people, this may have an impact on employees, increasing financial stress and potentially impacting productivity. Some employers might consider enhancing employee assistance programs to support their employees – our blog last month covered EAPs.

Payroll changes The start of the new financial year next week will have implications on employers’ payrolls in two ways – the new wage rates and the increase in the portion of national insurance that employers have to pay. These will add costs to businesses and so we have been working with our clients to ensure they have a clear picture of that, so they go into the 2025/26 tax year equipped with the information they need.

We’ve talked a lot in previous blog posts about how employers have a vital role to play in supporting their employees’ mental health and wellbeing. Whether it’s ensuring good mental health at work, supporting requests for flexible working or granting compassionate leave, employers make a significant contribution to good mental health of their staff.

Another way an employer can help their employees is to put an Employee Assistance Programme (EAP) in place, to provide confidential, professional help for employees facing a range of issues.

What is an Employee Assistance Programme?

An EAP is a workplace benefit designed to offer employees access to professional support and guidance on various personal and work-related issues. These programmes typically include services such as counselling, legal and financial advice, health assessments, and even managerial support for employers. The goal is to enhance employee well-being, improve productivity, and reduce absenteeism.

In general, offering an EAP is a non-taxable benefit provided it is offered to all employees although there are some exceptions so getting some advice might be worthwhile.

What can it offer?

EAPs can support both the employees and employers in several ways. For employees, it can offer:

Mental Health and Well-being Support

Mental health challenges such as anxiety, depression, and work-related stress are on the rise. EAPs provide employees with access to confidential counselling and psychological support, helping them manage their mental well-being effectively.

Legal and Financial Advice

Many EAPs provide employees with access to legal experts and financial advisors, helping them address issues such as debt management, legal disputes, or family matters.

An EAP can also support employers by:

Improved Workplace Productivity

Employees who struggle with personal or work-related problems may experience reduced productivity. By offering professional assistance, EAPs help employees deal with their issues, enabling them to focus better at work.

Reduced Absenteeism

Unresolved personal and health issues often lead to increased sick leave or absence. EAPs can reduce this by offering timely support and interventions.

Support for Managers

Managing a team can be challenging, especially when dealing with employees facing personal difficulties. EAPs offer managers guidance on handling sensitive situations effectively and legally.

How Do EAPs Work?

EAPs are generally offered through an external provider, ensuring confidentiality for employees who use the service. Employees can access support via a helpline, face-to-face counselling, online resources, or even mobile apps. These services are free to employees, as they are covered by the employer.

Most EAPs operate 24/7, allowing employees to seek help whenever they need it. Employers receive anonymised reports on usage trends, helping them understand workforce challenges without compromising confidentiality.

Employee Assistance Programmes can play an important role in supporting an employer’s workforce. As mental health awareness grows, investing in an EAP is a proactive step that benefits both employees and employers. It can also help recruitment by making the workplace as desirable place to work as it could make for a healthier, more productive work environment where employees feel valued and supported.