Any UC that can do Salary Sacrifice properly!

[rootsnall]

Yes - Parasol have confirmed they do support employers contributions by direct debit and sent me an AJ Bell form which i would need to fill in (however it was already filled in with someone else's details - not great for Data protection...)

They also said the following:

Pension contributions through us are classed as Employer contributions and these would be taken from your invoice value, not your taxable pay. As your employer we can also included [sic] a 13.8% top-up on each contribution sent to your provider. For example if you wanted to contribute £200 per week into your pension, £227.60 would be sent from us to your provider to add to your pension scheme as this payment would include that 13.8%.

Presumably this just means that i will benefit from the employer NI savings as well - but its strange that they have worded it this way as a grossed up amount rather than accounting for the amount i want to salary sacrifice and then working out NI on the rest? I've asked them to clarify.

One other concern i have is - that if i have to choose a regular monthly amount for the direct debit but my earnings differ month to month - eg over Christmas where we will have bank holidays and mandated days off - how does that impact the direct debit - do they still pay the fixed amount even if you don't earn as much that month? Has anyone any experience of this with any Umbrellas?

Thanks for all the help and guidance everyone.

Ask for an example calculation and that will explain the 13.8% bit, it should be a simple payment into your SIPP from the gross they receive but their system may split it !? The umbrella model doesn't suit a fixed direct debit for the reasons you state, again one for Parasol.

[gizzmo]

Check how the umbrella does it - some will only do manual payments and won't allow direct debits which is a problem as some pension firms only accept direct debit contributions.

You probably won't have a problem but best to be prepared.

Yes - Parasol have confirmed they do support employers contributions by direct debit and sent me an AJ Bell form which i would need to fill in (however it was already filled in with someone else's details - not great for Data protection...)

They also said the following:

Pension contributions through us are classed as Employer contributions and these would be taken from your invoice value, not your taxable pay. As your employer we can also included [sic] a 13.8% top-up on each contribution sent to your provider. For example if you wanted to contribute £200 per week into your pension, £227.60 would be sent from us to your provider to add to your pension scheme as this payment would include that 13.8%.

Presumably this just means that i will benefit from the employer NI savings as well - but its strange that they have worded it this way as a grossed up amount rather than accounting for the amount i want to salary sacrifice and then working out NI on the rest? I've asked them to clarify.

One other concern i have is - that if i have to choose a regular monthly amount for the direct debit but my earnings differ month to month - eg over Christmas where we will have bank holidays and mandated days off - how does that impact the direct debit - do they still pay the fixed amount even if you don't earn as much that month? Has anyone any experience of this with any Umbrellas?

Thanks for all the help and guidance everyone.

[rootsnall]

JSA umbrella let you pay a percentage of your gross into a SIPP up to 83% max. I was previously with Liberty Bishop, they also did variable amounts. Both into HL SIPP which I chose as they already had other contractors setup with them, I would think AJ Bell would be good to go also. No problems with either.

[eek]

You are right - this is on their website for all to view. I will still check my specific SIPP (AJ Bell) before signing up though.

Existing Pension Provider: If you already have a private pension before joining Parasol, we can make contributions into your existing pension scheme provided the scheme is able to accept employer’s contributions. You will benefit from a reduction in employees NI and PAYE tax. We will also pass on the savings in employer’s national insurance.

Check how the umbrella does it - some will only do manual payments and won't allow direct debits which is a problem as some pension firms only accept direct debit contributions.

You probably won't have a problem but best to be prepared.

[gizzmo]

That was March - things may well have changed.

You are right - this is on their website for all to view. I will still check my specific SIPP (AJ Bell) before signing up though.

Existing Pension Provider: If you already have a private pension before joining Parasol, we can make contributions into your existing pension scheme provided the scheme is able to accept employer’s contributions. You will benefit from a reduction in employees NI and PAYE tax. We will also pass on the savings in employer’s national insurance.

[eek]

I am in discussions with Parasol as will be starting a contract in Dec and client wants me to sign up with Parasol. I had a call with Parasol who mentioned that they can pay into my personal pension or SIPP and would not be limited to their scheme but now i have read this i am worried. Admittedly they have not sent me any information on the pension salary sacrifice in writing - everything was discussed on the telephone only. I may have to double check before signing up.

That was March - things may well have changed.

[gizzmo]

Parasol don’t let you put into a SIPP. Only there appointed pension scheme.

I went with Paystream for exactly this reason.

I am in discussions with Parasol as will be starting a contract in Dec and client wants me to sign up with Parasol. I had a call with Parasol who mentioned that they can pay into my personal pension or SIPP and would not be limited to their scheme but now i have read this i am worried. Admittedly they have not sent me any information on the pension salary sacrifice in writing - everything was discussed on the telephone only. I may have to double check before signing up.

[Paralytic]

What payment terms for any pension deducted via salary sacrifice do you have with Paystream? Just joined as umbrella company, had my first month, and have to admit I'm very confused. I chose to get paid monthly, but it seems that the pension deduction is not paid to my pension provider until 19th month after i get paid, so in effect an extra delay of 4-5 weeks after I get paid for the month before. They can't explain why, but they have my money for that time, when it should be paid at same time into my plan. Strangely this was never explained when I questioned this before joining.

This will likely be to reduce administration on their side - so they send all payments over to that pension provider on that day for all contractors. I suppose they might earn a tiny bit of interest on those funds too.

As for them not telling you this; did you ask when your contributions would be sent over to your pension provider?

[Paul99]

Parasol don’t let you put into a SIPP. Only there appointed pension scheme.

I went with Paystream for exactly this reason.

What payment terms for any pension deducted via salary sacrifice do you have with Paystream? Just joined as umbrella company, had my first month, and have to admit I'm very confused. I chose to get paid monthly, but it seems that the pension deduction is not paid to my pension provider until 19th month after i get paid, so in effect an extra delay of 4-5 weeks after I get paid for the month before. They can't explain why, but they have my money for that time, when it should be paid at same time into my plan. Strangely this was never explained when I questioned this before joining.

[GhostofTarbera]

Due to new IR35 regs I've joined an Umbrella Company.

I currently pay a fixed sum into a personal pension, and was told that I'd be able to continue this under the UC by using salary sacrifice.

However, they have some convoluted method of calculating this. I currently pay £1000/month to the pension provider.
The UC say they can't simply pay this fixed amount. Instead they calculate it at £50/day and nothing for days I don't work. E.g. if I have a few days holiday in a month, nothing would go to my pension for those days!

So the amount going to my provider would vary depending on number of days worked in a month.

My pension provider cannot process non-fixed amounts.

Does anyone know of a UC who can simply work on a fixed amount each month?

Anther madman paying into a pension in bear market

Just burn your money


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[BABABlackSheep]

Parasol don’t let you put into a SIPP. Only there appointed pension scheme.

I went with Paystream for exactly this reason.

[Acme Thunderer]

I have managed to remain with my Ltd but was all prepared to go with Parasol, they seemed to setup a monthly fixed sum salary sacrifice with no real issues, im surprised at your post as it appears that most UC would rather just setup a standard monthly amount..as clearly its less admin, your brolly seems to want to make it more complicated for itself.

There is the potential trip wire of national minimum wage. If you pay a fixed amount monthly but don't earn enough because of bench, sick or holiday then you could potentially be getting paid less than the NMW and that is not allowed. UC takes the easy option and takes takes a portion during each payroll run and pays it to your SIPP once a month. Guaranteed you never go below NMW

[andydd68]

Due to new IR35 regs I've joined an Umbrella Company.

I currently pay a fixed sum into a personal pension, and was told that I'd be able to continue this under the UC by using salary sacrifice.

However, they have some convoluted method of calculating this. I currently pay £1000/month to the pension provider.
The UC say they can't simply pay this fixed amount. Instead they calculate it at £50/day and nothing for days I don't work. E.g. if I have a few days holiday in a month, nothing would go to my pension for those days!

So the amount going to my provider would vary depending on number of days worked in a month.

My pension provider cannot process non-fixed amounts.

Does anyone know of a UC who can simply work on a fixed amount each month?

I have managed to remain with my Ltd but was all prepared to go with Parasol, they seemed to setup a monthly fixed sum salary sacrifice with no real issues, im surprised at your post as it appears that most UC would rather just setup a standard monthly amount..as clearly its less admin, your brolly seems to want to make it more complicated for itself.

[malvolio]

Clarity and ContractorUmbrella have sensible schemes, AIUI. There may be others

Or move your SIPP to somewhere more accommodating...

[Bankrobber]

Due to new IR35 regs I've joined an Umbrella Company.

I currently pay a fixed sum into a personal pension, and was told that I'd be able to continue this under the UC by using salary sacrifice.

However, they have some convoluted method of calculating this. I currently pay £1000/month to the pension provider.
The UC say they can't simply pay this fixed amount. Instead they calculate it at £50/day and nothing for days I don't work. E.g. if I have a few days holiday in a month, nothing would go to my pension for those days!

So the amount going to my provider would vary depending on number of days worked in a month.

My pension provider cannot process non-fixed amounts.

Does anyone know of a UC who can simply work on a fixed amount each month?