Salary sacrifice time delay

[Nazaire99]

I am currently with Brookson who overall have provided excellent service. However, I am swapping to Giant* specifically and only because of delays in salary sacrifice hitting my pension.

Brookson run a rolling 4 week payment period and, by law they have to pay the pension contributions I believe within 22 days from the end of this period. Because the payment period is not fixed to the end of the month, when I typically get paid, if they receive funds from my agency a day after the last period ends, I have to wait the 4 weeks of the new payment period plus the 22 days for the pension to hit my account.

As I've said the service I've received has been excellent, but this tax year I'm taking advantage of carry forward of unused contributions from previous years, so my pension payments are much larger than my net salary (which Brookson pay on receipt of funds). Due to vagaries of the payment cycle, since I increased my pension payments some pension payments have taken nearly 2 months from receipt of funds to hit my pension. Essentially I have up to 4 months credit exposure (I'm paid a month in arrears) to my agency and Brookson - so much for being a deemed employee because I don't take financial risk - its higher than when I worked Ltd!!

Another factor to take into account is that the pension company record the payments upon receipt, which given the large delay means that pension payments from monies earnt and paid as salary in one tax year will appear in the next one, which may have tax implications (e.g. loss of carry forward).

*I only have a choice of 3 umbrellas through my agent - Brookson, Giant and another who do not offer salary sacrifice. This is another problem, which I believe is a fundamental problem with the umbrella sector, which is essentially unregulated. Because there are so many cowboys firms out there and agencies have limited bandwidth, they can only vet a limited number of firms - hence the limited choice. As a further point I think it is fundamentally unjust being forced to work through companies that are not regulated.

[I am tired TIRED]

I get paid around 6th of each month and then Paystream credits pension amount on 19th of next month...so, it is almost 43 days on an average (Nov payroll on 06-Dec and pension credit on 19-Jan).. Seems like no motivation to remove inefficiency as they do get interest for this period anyway.

Parasol mirrors this - So November's Salary Sacrifice hits the SIPP provider around the 22nd of January

[eek]

I get paid around 6th of each month and then Paystream credits pension amount on 19th of next month...so, it is almost 43 days on an average (Nov payroll on 06-Dec and pension credit on 19-Jan).. Seems like no motivation to remove inefficiency as they do get interest for this period anyway.

That period also corresponds directly with how HMRC works PAYE periods run 6th -5th of a month with payments due on the 19th of that month.

so while I can see that it’s an incredibly long period operationally it makes sense

[patel]

I get paid around 6th of each month and then Paystream credits pension amount on 19th of next month...so, it is almost 43 days on an average (Nov payroll on 06-Dec and pension credit on 19-Jan).. Seems like no motivation to remove inefficiency as they do get interest for this period anyway.

[Heathmount]

I’ve been with Paystream for a few years. I get paid on the last working day of the month and then my pension contribution is in my SIPP (AJ Bell) on the 19th of the following month, possibly the 21st if the 19th is a weekend. Even accounting for pay day being a Friday I don’t think I’ve ever had to wait for more than 23 days for my contribution to hit my SIPP.

I’m not saying other Umbrellas don’t do it better (sounds like Clarity do), I’m just saying I’ve never had to wait 30 days for a payment.

[lucyclarityumbrella]

When dealing with so many individual SIPPs, it is understandable as it is very much a manual process for each contractor, it is also difficult when payments may not be 100% regular from the agency / client (ie on a specific day). On our side we do try and make payment to SIPPs within a few days of the contractor being paid, but as stated it is very much a manual process so not 100% full proof, unless there is a nudge from the contractor

[patel]

Looks like this is same process for three umbrellas that I have worked with - Paystream, Nasa Group and Contractor Umbrella. And all of them credits amount to SIPP on 19th of next month. So, there may be some constraint or they all aligned to process to earn interest.

There are not many umbrellas anyway giving you choice of SIPP vendors so have to appreciate Paystream, Nasa group at least for that.

[ContractorBanking]

I found the Paystream delay annoying too. I would probably choose another unbrella next time I need one (anyone from Paystream reading this?)

Totally agree. Next time, I certainly won't bother with Paystream, its an extra revenue stream for them, holding on to your money for an entire month.

In fact, they send you an email around 3 weeks after they've paid you, to tell you your pension money will be hitting your SIPP on a particular date, usually in a another week or so. Do it now!

Utterly shocking.

[t0bytoo]

I found the Paystream delay annoying too. I would probably choose another unbrella next time I need one (anyone from Paystream reading this?)

[eek]

I'm with Paystream and when the client pays, the funds are in my account the same day.

However, it takes on average 30 days for the pension to hit the SIPP.

I checked with the SIPP provider and they take no more than a day or 2 max, so the delay is squarely on the Paystream side.

I queried this with them a few weeks ago and they say they do a batch run, etc and there is a manual process, etc but was not convinced.

What's it like with other umbrella companies?

Clarity is very quick at sending pension contributions out - it was usually the same day as you were paid

[ContractorBanking]

I'm with Paystream and when the client pays, the funds are in my account the same day.

However, it takes on average 30 days for the pension to hit the SIPP.

I checked with the SIPP provider and they take no more than a day or 2 max, so the delay is squarely on the Paystream side.

I queried this with them a few weeks ago and they say they do a batch run, etc and there is a manual process, etc but was not convinced.

What's it like with other umbrella companies?