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Conversations with a hairdresser
I have known my hairdresser for years; she knows my friends; she knows my mum. She has been a hairdresser all her life. She has been an employee of a major plc, an employee of a reasonably sized limited company and several years ago branched out and set up her own business.
Our conversations don’t tend to veer towards holidays. In the past, we have discussed the apprenticeship scheme she runs in conjunction with the local college, and the last time I was in, we chatted about pensions.
A surprise confession
I have to admit to being surprised. As a small business owner she has already been to a seminar organised by her accountant, she has done her research and she knows exactly what will be required of her. My hairdresser doesn’t stage yet, but she is ready and has checked her staging date by going online to the Pensions Regulator’s website.
At the moment, she is leaning towards NEST. She knows that currently half her staff won’t be automatically enrolled, or qualify for a company contribution, as they are either over state pension age, under the age of 22 and/or work part time and so have insufficient earnings. Yet she has already factored in assumptions on take-up rate into her business plan, as well as being aware of the need for creating enough time to ensure she is ready at her staging date.
Then, with scissors in hand, she proceeded to tell me that she had spoken with her accountant and that she was glad of the clarity on her position as a company director and her exemption from auto-enrolment, as well as telling me that she was mindful of the position of her self-employed stylist.
Of course, she is far more valuable to me as a hairdresser than as a potential client (you should never mix hair with work, hairdressers have too much power!), but I know that as her staging date approaches, she will be ready and get advice if needs be.
So is this normal?
Maybe not, although awareness of auto enrolment is increasing and will continue to do so. Perhaps the question should be, does my hairdresser believe that as a small employer there is any value to her in offering a good pension scheme?
She has two employees (one now over state pension age) who have been with her since she started her own business, and, indeed, they worked with her for 15 years previously.
But the nature of her business is such that staff move, either towards the glamour of the bigger organisations that she was once part of, or they become self-employed or they decide that hairdressing is not for them. A good pension scheme will not invoke loyalty within her staff, so for now she will do the bare minimum and no more.
What will the future hold?
Eventually, workplace pensions will be the norm for every eligible employee and employer in the UK. Clients in less transitional professions will find that staff will see the value in both pension provision as well as other workplace benefits such as death in service benefits, healthcare options, bike to work schemes and childcare vouchers.
In addition, with the Government introducing a statutory exemption on income tax for qualifying trivial benefits in kind costing £50 or less, employers can make small additional touches to demonstrate their appreciation to staff.
And maybe the lessons learnt by her young apprentices today will ensure that in the future they consider their own pension planning for the future in a balanced and prudent way. After all, we will always need income in retirement … and hairdressers!
Karena Woodall is a consultant at Mattioli Woods.
This article was provided by Mattioli Woods.
