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.
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Reply to: Salary sacrifice time delay
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Previously on "Salary sacrifice time delay"
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Originally posted by patel View PostI 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.
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Originally posted by patel View PostI 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.
so while I can see that it’s an incredibly long period operationally it makes sense
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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.
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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.
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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
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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.
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Originally posted by t0bytoo View PostI found the Paystream delay annoying too. I would probably choose another unbrella next time I need one (anyone from Paystream reading this?)
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.
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I found the Paystream delay annoying too. I would probably choose another unbrella next time I need one (anyone from Paystream reading this?)
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Originally posted by ContractorBanking View PostI'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?
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Salary sacrifice time delay
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?Tags: None
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