HR Grapevine Advent Calendar: Organising Santa's pension

HR Grapevine Advent Calendar: Organising Santa's pension

We all know that the retiring age is getting later and later, and Santa is no exception.

As hard as it is to comprehend, one day Santa must hang up his red coat and boots and settle down, and when that happens, just like the rest of us, he will need his pension money sorted and ready to go.

Alan Morahan, Managing Director at Punter Southall Aspire, has been advising Santa about his pension plan.

The Department of Work and Pensions suggests for a basic lifestyle, not including Santa’s sleigh, he would need £12,000 a year. For a more comfortable lifestyle, Santa could keep his sleigh for the price of £26,000 a year, and if he wants a lavish retirement, he would need just over £40,000 a year.

However, a lot of people are experiencing a pension shortfall, and with the added uncertainty of how Brexit will affect them, it needs to be considered for everyone, including Father Christmas.

Morahan has advised Santa that his pension provision should meet his lifestyle needs and expectations, including Sleigh maintenance, and looking after the reindeers, which can’t be cheap.

It’s uncertain when Santa, or anyone, will be able to retire as the state pensions are going through significant changes, with more likely to come by the time Brexit is in full swing. By 2020 the state pension age for men and women will be 66, with more rises already scheduled.

With the rising state pension age and the scrapping of compulsory default retirement age, Aviva predicts that by 2029 early retirement “would be relegated to the dustbin of history.”

Given the nature of Santa’s job, with his high sugar intake and his rotund waistline, not to mention the pressure of the tight Christmas deadline - his blood pressure must be at an all-time high.   Morahan recommends that Santa takes out an enhanced or impaired life annuity, which is ideal for those with a reduced life expectancy.

Taking all this into consideration, it is recommended that Santa continues funding his pension while he can, but to be aware of the reductions of lifetime allowance made in April this year. The allowance went from £1.25million to £1million and a taper was also introduced to the annual allowance, reducing it by 50p for every £1 of income between £150,000 and £210,000 to a minimum of £10,000. 

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