Schemes that are genuinely struggling to pay the full amount of the levy within the timeframe may be able to agree a payment plan with us.
Under current legislation all pension schemes have to pay the levy within 28 days, with an interest charge for late payment, which is currently 5 per cent above the Bank of England base rate.
However we understand that this may not be possible for some schemes, so following a consultation with members of our SME Forum, we’ve refreshed our payment plan policy so that reduced interest charges will apply if a payment plan application is authorised.
Who can ask for a payment plan
Schemes or the sponsoring employers of those schemes that can prove they’re genuinely struggling to meet the levy payment within the 28-day timeframe can ask for a payment plan.
What you need to do
You need to explain why the full levy can’t be paid within 28 days without causing hardship or material detriment to the scheme or employer. It’s vital that you complete an online application form as soon as possible after you receive your levy invoice.
You'll need to upload supporting evidence and specify the quickest reasonable timeframe over which you’re able to pay your levy.
The form must be submitted by the scheme trustee or authorised scheme manager in the case of scheme applications, and the Finance Director or other appropriate officer of the company in the case of employer applications.
What evidence you need to provide*
- Proof that there are insufficient liquid funds in the scheme; for example, a breakdown of scheme assets plus notice terms
- Why timely provision of liquid funds has not been possible; for example, unexpected calls on cash
- Evidence that the employer is obliged to pay the levy; for example details within the schedule of contributions
- A cash flow forecast for the employer, reconciled to bank accounts / comparative information from previous years with a clear explanation of why the forecast shows an payment plan is necessary
*Examples provided above illustrate what can be provided as part of an application; other evidence will be considered if supplied with a clear explanation of why it is relevant.
Complete an application form
For help and support with payment plan applications please email our Credit and Collections Team at [email protected]
Frequently Asked Questions about levy payment plans
How will my application be assessed?
Your application and supporting evidence will be reviewed in line with legislation and the policy set out on this webpage. If the Board considers that it is appropriate to offer a payment plan, having taken into consideration any exceptional circumstances that may exist in relation to that scheme, the application will be approved.
Are payment plans limited to certain size schemes?
Although we do not apply a strict criterion that payment plans would only be open to schemes sponsored by SMEs, the combination of our policy intentions that i) the delay doesn’t have a material impact on our overall levy collection, and ii) that otherwise paying the levy in full would cause significant hardship to the scheme / sponsor, will mean that payment plans are more likely to be granted to smaller employers. We have devised this policy with the expectation that in most cases larger employers should be able to access ways to pay the levy promptly.
What are expected standard terms of a payment plan
Typically, zero interest will be accrued in the first month, the following two months at a reduced rate of 3% with the standard rate of 5% applied thereafter.
Can I make part payment and pay the balance on a payment plan?
Yes. All requests will be considered on a case by case basis.
What will happen if I miss a payment?
You may have to pay the full amount of accrued interest, which is 5 per cent above the Bank of England base rate.
I am appealing my levy invoice; can I still apply for a payment plan?
Yes. Paying your levy – unless it’s a waiver application – either in full or as a payment plan, won’t affect any appeal or review.
What will happen if I apply for a payment plan more than 28 days after receiving the invoice?
You may not be accepted. Please contact the Credit and Collections Team ([email protected]) and explain why your request has been delayed.
Can I apply for a payment plan before I receive my invoice?
No. We need to have calculated your levy invoice before we can consider any application.
I received a revised invoice for a previous levy year for a higher amount, can I now apply for a payment plan to pay it?
Yes, you can. Please contact the Credit and Collections Team [email protected]
Is there a limit on the size of the levy invoice for a payment plan to be agreed?
All payment plan requests are dealt with on a case by case basis.
Will the employer’s credit score be affected if you agree a payment plan to pay the invoice?
No, the employer’s credit score won’t be affected as the liability to pay the levy is with the trustees of the pension scheme.
You can still apply for a payment plan.