If your schemes or the sponsoring employer of your scheme is struggling to meet the levy payment within the 28-day timeframe there are ways to extend your payment terms.
Under current legislation all pension schemes have to pay the levy within 28 days. An interest charge for late payment of the levy – currently five per cent above the Bank of England base rate – is payable if the 28 day term isn’t met. However we understand this may not be possible for some.
Apply for a COVID-19 payment extension
The COVID-19 pandemic has presented significant impact on cash-flow and asset valuations for many businesses and schemes. We understand this may mean the 28 day term for payment of your levy invoice is difficult to meet. In these circumstances, an extension of terms might be helpful to manage payment of your levy.
While legislation doesn’t let us routinely extend the levy invoice payment terms, we can waive interest charged for late payment, if the relevant criteria are satisfied.
Are you struggling to pay the levy within 28 days, but could commit to paying within 90 days?
If this is the case we’ll consider, if appropriate, waiving the interest accrued on late payment.
To take advantage of this, please complete our COVID-19 impact notification form - which should be submitted within 28 days of receiving your levy invoice or you can read our further guidance for more information.
Apply for a payment plan
Our payment plan policy allows you to apply for a payment plan if you can prove you’re genuinely struggling to meet the levy payment within the 28 day timeframe.
A payment plan allows you to pay the levy in monthly instalments over a period of more than 90 days. Typically with reduced interest charges if a payment plan application is authorised.
You’ll need to provide evidence that proves financial hardship with an explanation of why the evidence is relevant.
Typically, zero interest will be accrued in the first 90 days. The following 60 days will accrue at a reduced rate of 3% and a standard rate of 5% above the Bank of England base rate applied thereafter.
You can only apply for a payment plan after you receive your levy invoice.