State of the Market

[rootsnall]

But is there really much of a benefit paying pension contributions when with an umbrella? Something tells me not.
I'd rather max out my S&S ISA limit first because I've got full control over accessing it.

If you are saving for retirement and can afford it, then it really is a no brainer. If it's coming out of higher rate tax band you are saving 40% tax, 13.8% employers NI and at least some 12% employees NI. When you take it out you will get £12K ( and rising ) tax free, and then likely just lower rate tax on anything over that. You are losing over half up front with the ISA route.

[eek]

Missing the tax when you take it out. It's not such a simple calculation... depends what your income level is like when you take it out. Obviously with inside ir35 contract the tax liability is so high it's almost always better to put it into pension you are right and i did skip over that. But with a ltd company some people will be better off taking out what they can at basic rate + corp tax if they end up in a higher tax bracket in retirement age, but anyway that's a good problem to have...

But we started talking about Umbrellas see

I can see why maxing out pension contributions in a perm job instantly doubles your money because the employer at least matches your contribution.

But is there really much of a benefit paying pension contributions when with an umbrella? Something tells me not.
I'd rather max out my S&S ISA limit first because I've got full control over accessing it.

And it's little different once you start talking about taking dividends when your income is above £50k

£3000 from company to pension -> £3000 in pension

Via dividends

£3000 = £2430 after corporation tax
£2430 would require £789.75 in dividend tax
So from your original £3000 you can invest £1640.25 in your ISA

[mattster]

But with a ltd company some people will be better off taking out what they can at basic rate + corp tax if they end up in a higher tax bracket in retirement age, but anyway that's a good problem to have...

You're likely to max out your basic rate anyway, regardless of how much you put in your pension, but obviously the less tax you have to pay on your earnings, the less absolute benefit there is in pension contributions. There are other knock-on benefits from contributing, though, especially within IR35, which is that your income for tax purposes is reduced. This could put other income in a lower tax threshold, or make you eligible for child benefit etc.

[GhostofTarbera]

Has the state of the market got so bad we just post tedious pension posts now?


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[Fraidycat]

Has the state of the market got so bad we just post tedious pension posts now?

It is a bit concerning that 14 days into the new year we havent seen a flurry of posts saying the market in general is having a good January bounce.
eg Posters saying they are getting lots of calls from agents, interviews being arranged etc, but maybe it is still too early.

Or did the latest national lockdown kill off any chance of a new year bounce?

[PCTNN]

I haven't noticed any difference from the last months of 2020. It's still very quiet.

[eek]

It is a bit concerning that 14 days into the new year we havent seen a flurry of posts saying the market in general is having a good January bounce.
eg Posters saying they are getting lots of calls from agents, interviews being arranged etc, but maybe it is still too early.

Or did the latest national lockdown kill off any chance of a new year bounce?

We might of done.

Then Boris closed everything down again on the Monday 4th - I know I stopped rushing to employ someone at that point.

[The Butcher]

I've had One call from an agent this year.
£300 inside IR35 with BP in London - WTF

[Fraidycat]

I've had One call from an agent this year.
£300 inside IR35 with BP in London - WTF

WTF indeed, thats like 3000 a month after tax if you take some decent holidays (not that you could afford to at that rate).

Im hoping because of the Vaccine rollout, the market will pick up in May as things return back to towards normal.

But not im not very hopeful about the next three months.

But private sector IR35 in April might even scupper a May recovery for the contractor sector

[Paralytic]

Ive been wondering this, do you think the inside rates listed are after tax, or before.

Yes.

I've seen both, so its important to read exactly what the advert says. And you'll most likely still need to speak to the agent to get clarification. And they'll probably get it wrong.