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27 Jun 2016

Brexit vote likely to impact UK workplace benefits

With the majority of the UK population having voted to leave the European Union (EU) last week, the Employee Benefits website explored the impact this decision is expected to have on employers and employees in Britain.

The referendum results were announced on 23 June 2016, with a 71.8% turnout of voters. The slight majority (52%) voted for Britain to leave the EU, but it is not yet clear when negotiations will begin or how the average person in the UK will be affected.

On the same day that the results were announced, Prime Minister David Cameron announced his plans to step down from his position by October 2016, leaving the triggering of Article 50 to his successor.

Once Article 50 has been triggered, the withdrawal process will begin and Britain will embark on a two-year negotiation period to leave the EU.

Already, concerns have been raised about the referendum result´s impact on the UK economy and job sector, as well as certain areas of employment law. Experts are warning that workplace benefits such as pensions and share schemes are likely to take a blow.

“The impact of a ‘leave´ vote is much bigger than simply changing the political landscape of the UK,” explained Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD). “It stands to have a significant impact on the world of work and future planning within organisations.”

He is also calling on the government to launch a “broad and thorough consultation” with organisations and their staff, taking the time to comprehend the impact of any future changes. It also needs to work with businesses “to minimise risk to individuals, organisations and the economy.”

Employment specialist at Blake Morgan, Ruth Christy, said that in reality a Brexit decision was unlikely to make “too many dramatic changes” to employment law. Many employment rights in this country either originated here or have become so embedded in UK law as attitudes towards social issues have progressed that any decision to scale back major employment rights “would, in all likelihood, be politically unpopular,” she explained.

In terms of pensions, Steven Cameron – pensions director at Aegon UK – advised savers not to panic. He stated: “If you have a defined contribution or personal pension, it´s value will be affected by stock market movements and if you are thinking of taking money out in the immediate future, we recommend you first seek advice.”

Copyright M2 Bespoke 2016

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