Reply to: Salary sacrifice time delay

[Win]

Literally everyone apart from parasol will charge a small fee for processing salary sacrifice pensions...

I think Brookson do not charge from my previous expeirence, however they only send contributions to Aegon and yes there is a delay as well of nearly a month.

[Juninho1976]

I've used Giant in the past.
Their fee for processing salsac payments into my SIPP was not a small fee..
They make you join their "Premium" package, an expensive bunch of tulip "benefits" that you'll never use.
It's the only route to having payments made to your SIPP, and they take a month or two to make that happen. Every time.

So I'm following this thread with great interest.

I'm going to go with nasa group and I can tell you in a few months how good they are. They're a lot more transparent to me than others so far. I am ok with the small fee of £5 per week for the SIPP processing (taken pre any other deductions so net cost is like half of that).

They were super helpful with lots of illustrations too to help me work it all out.

[Dorkeaux]

Literally everyone apart from parasol will charge a small fee for processing salary sacrifice pensions...

I've used Giant in the past.
Their fee for processing salsac payments into my SIPP was not a small fee..
They make you join their "Premium" package, an expensive bunch of tulip "benefits" that you'll never use.
It's the only route to having payments made to your SIPP, and they take a month or two to make that happen. Every time.

So I'm following this thread with great interest.

[Protagoras]

Not quite, technically it's the umbrella's money that you earnt for the umbrella.

Legally, yes. Morally, I think it's the worker's money.

[eek]

The only benefit of using an umbrella company is that one can reduce NI liability (by reducing salary) and pass the financial benefit of doing so to pension.
The notion that this might not be passed in full to pension is ridiculous - it's the worker's fee income.

Fair enough, I think, making an admin charge to pass funds to a SIPP. That said, a while back when I was an umbrella worker, no admin fee was charged but probs things have changed since then.

Not quite, technically it's the umbrella's money that you earnt for the umbrella.

The correct thing would be that every penny is paid to you but some umbrellas are owned by private equity who have large debts that need to be paid because they overpaid for the umbrella in the first place.

[Protagoras]

The only benefit of using an umbrella company is that one can reduce NI liability (by reducing salary) and pass the financial benefit of doing so to pension.
The notion that this might not be passed in full to pension is ridiculous - it's the worker's fee income.

Fair enough, I think, making an admin charge to pass funds to a SIPP. That said, a while back when I was an umbrella worker, no admin fee was charged but probs things have changed since then.

[eek]

Thanks !!

I only just clocked that when they sent the illustration... they effectively take 3.5% but in the notes it said that was capped at £100 (which I then thought was similar to the admin fees but looks like the cap is per month or maybe per week but either way a lot).

Does anyone on here have experience of which providers do a small fee but pass on ALL the NI savings (I am hoping to put quite a lot into my pension next year!) - I am limited to a short 'PSL' list.

some of the companies on the short list I have heard of (and some I have used!):
parasol
giant
paystream

and others I have not like azebra, compass contracting, nasagroup, clipper, umbrella, sterling group and a few others.

Of the above I think nasagroup will pass on the full savings and charge £5 per week^ and seem to get ok reviews?

Literally everyone apart from parasol will charge a small fee for processing salary sacrifice pensions...

[Juninho1976]

Yes – there are effectively two separate timings to be aware of.

From a tax point of view, with salary sacrifice you get the tax and NI saving in the pay period the salary is reduced (i.e. you pay tax on a smaller gross amount as your earnings have reduced).
But from a pension perspective, the contribution counts towards the tax year in which the pension scheme actually receives the money.


On Parasol - worth just checking the fine print on that.

I’m not sure exactly what they’re doing right now, but until fairly recently their 'selling point' was that they’d only top up salary sacrifice pensions by ~11.5%. Most umbrellas pass through the full employer NIC saving (15% now) and then charge a small, visible admin fee (often £5–£10).

So while Parasol may not show a separate 'admin fee', the cost is (or certainly was) taken by retaining part of the NIC saving instead. From memory that was up to £100 per week.

In other words: 'no fee' doesn’t necessarily mean 'no cost'. Always compare theactual pension contribution and net take-home, not just whether there’s a line item called a fee.

https://parasolgroup.co.uk/blog/2024...bove-the-rest/

Thanks !!

I only just clocked that when they sent the illustration... they effectively take 3.5% but in the notes it said that was capped at £100 (which I then thought was similar to the admin fees but looks like the cap is per month or maybe per week but either way a lot).

Does anyone on here have experience of which providers do a small fee but pass on ALL the NI savings (I am hoping to put quite a lot into my pension next year!) - I am limited to a short 'PSL' list.

some of the companies on the short list I have heard of (and some I have used!):
parasol
giant
paystream

and others I have not like azebra, compass contracting, nasagroup, clipper, umbrella, sterling group and a few others.

Of the above I think nasagroup will pass on the full savings and charge £5 per week^ and seem to get ok reviews?

[LouiSapphireContracting]

How does it work in terms of which tax year teh contributions apply to? I assume if for example a payment was made after April 5th it goes into the next tax year right?

On a side note- does anyone use parasol? I want to double check as they said on the phone they won't charge any admin fee for paying into my sipp (I have that with a platform) and can support all SIPPS except vanguard?

Yes – there are effectively two separate timings to be aware of.

From a tax point of view, with salary sacrifice you get the tax and NI saving in the pay period the salary is reduced (i.e. you pay tax on a smaller gross amount as your earnings have reduced).
But from a pension perspective, the contribution counts towards the tax year in which the pension scheme actually receives the money.


On Parasol - worth just checking the fine print on that.

I’m not sure exactly what they’re doing right now, but until fairly recently their 'selling point' was that they’d only top up salary sacrifice pensions by ~11.5%. Most umbrellas pass through the full employer NIC saving (15% now) and then charge a small, visible admin fee (often £5–£10).

So while Parasol may not show a separate 'admin fee', the cost is (or certainly was) taken by retaining part of the NIC saving instead. From memory that was up to £100 per week.

In other words: 'no fee' doesn’t necessarily mean 'no cost'. Always compare theactual pension contribution and net take-home, not just whether there’s a line item called a fee.

https://parasolgroup.co.uk/blog/2024...bove-the-rest/

[Juninho1976]

How does it work in terms of which tax year teh contributions apply to? I assume if for example a payment was made after April 5th it goes into the next tax year right?

On a side note- does anyone use parasol? I want to double check as they said on the phone they won't charge any admin fee for paying into my sipp (I have that with a platform) and can support all SIPPS except vanguard?

[LouiSapphireContracting]

Hi all. New poster here!

I’ll throw in my two-pence from an umbrella’s perspective — and I’m here to learn as much as to offer a view.

Most umbrellas work on a monthly cycle for pensions and the reasons are fairly unglamorous. The issue is the practical admin burden. Given how transient contracting is, we can’t operate a simple direct-debit model with pension providers, so each pension payment is effectively handled on a bespoke basis. Remitting pensions weekly means additional processing and reconciliation.

Weekly pension payments are possible, but at scale it usually means either higher admin charges or fewer pension options to make it workable.

Genuine question for those paid weekly: would weekly pension payments be preferable if it meant paying a bit more or fewer options, or is monthly in arrears acceptable if it’s accurate and transparent?

[Protagoras]

Are you paid weekly or monthly?
Getting paid on 09/12 for work carried out for the month of November seems a remarkable payment term - I am more used to 30 days.

When I was a contractor, I always insisted on tight payment terms. For monthly billing I never agreed terms of more than 10 days and had one contract where I was able to insist on 3 days!
I only ever did one weekly paid contract and that was on 5 days payment terms.

In my experience many contractors have been reluctant to push for fair credit terms, and I've worked on contracts alongside less demanding folk who got worse terms than I did.

And after my contracting days, when I was an umbrella 'employee' I still pressed for and obtained similar terms.

30 day payment terms would be way beyond my risk tolerance for anything other than a B2B contract where I could insure default risk!

Of course the market - or what remains of it - currently favours clients and supply chain to the detriment of the worker, so maybe it's just not possible to be treated reasonably fairly any more. When you've done the work as required, it's your money, not someone else's to hold onto for no good reason.

I might add that anyone doing work for me gets paid promptly; I think where someone does the work, they should be paid without delay. It's a matter of common courtesy.

[WTFH]

Yes it is. PayStream are pretty good with salary payments and usually pay me the same day the agency pays or the day after. However the issue is with salary sacrifice payments. For instance I got paid 9-Dec-2025 ... The salary sacrifice payment won't reach my pension until 19-Jan-2026 so that's 41 days after.

Are you paid weekly or monthly?
Getting paid on 09/12 for work carried out for the month of November seems a remarkable payment term - I am more used to 30 days.

Or ar you're saying that the payment on 9th December was for your work in the month of October? I've just looked back at some of your previous posts and I'm wondering.

[GreenLantern22]

Given the fees charged by umbrella companies, they probably need hundreds of 'employees' to be able to cover costs. Even where these 'employees' have differing levels of pension subscription and providers, once setup this should be the bread and butter of the payroll software umbrella companies use.

In business any party delaying payment of a supplier after being paid by a client is benefiting from holding the funds in the interim.

Part of the problem with this client-agent-umbrella-employee supply chain is the credit line.

Frankly, work like an employee should equate to being paid like an employee; really a party providing an 'inside' determination should be required to pay all workers on the same schedule as its direct employees.

Umbrella workers should not be required to provide business supply chains with personal credit.

Couldn't agree more. We oay way more taxes, have way less benefits (no sick pay, no paid holidays, etc) and yet we are treated like second class citizens...

[Peoplesoft bloke]

Part of the problem with this client-agent-umbrella-employee supply chain is the credit line.

Frankly, work like an employee should equate to being paid like an employee; really a party providing an 'inside' determination should be required to pay all workers on the same schedule as its direct employees.

Umbrella workers should not be required to provide business supply chains with personal credit.

100% agree - the one time I did an inside gig I got weekly payments and once they started with the "we haven't received invoice/timesheet/paperwork" nonsense, I threatened to walk if they didn't pay on time. It was a panic project though.