Jurisdiction(s):
United Kingdom

Key definition

Grace period definition

What does Grace period mean? A grace period is a contractually agreed window after a due date during which a missed payment or other breach can be remedied without triggering an event of default, acceleration, termination or cancellation, and typically without incurring late payment fees. It is not a term defined by statute; it is a descriptive expression used across finance, insurance and commercial contracts. Key features include: a defined length (for example, 3–30 days), identification of the obligations covered (commonly principal or interest payments), and suspension of default-based remedies and charging of default interest or late fees until expiry. Ordinary interest usually continues to...

Grace periods for section 75 employer debts in multi-employer defined benefit schemes: triggers, notices, extensions, effects and interaction with deferred debt arrangements

Published by a LexisNexis Pensions expert

Practice notes

A risk with employment cessation events is that they can be set off unintentionally, for example because the last remaining active member of an employer in a multi-employer defined benefit scheme has left. The employer debt Regulations, SI 2005/678 were amended with effect from 6 April 2008 to introduce grace periods, a device intended to help employers deal with accidental employment cessation events. For further information on employment cessation events and other section 75 triggers, see Practice Note: When is a section 75 debt triggered? When can a grace period be used?

When can a grace period be used?

An employer in a multi-employer defined benefit scheme may notify the trustees that it wishes to enter a grace period (by giving a grace period notice) if:

that employer ceases to employ active members at a time when at least one other employer still employs active members, thereby creating an employment cessation event, and
it intends to employ at least one individual who is an active member of the scheme during the following 12-month period (or any longer period agreed by the trustees—see: Length of grace period below)

The employer is not required to obtain the trustees’ consent to...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Web page updated on 22/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...