Resource Solutions Umbrellas - which one allows max pension contributions?

[CandiceMarie]

Hi

I'm hoping to get a contract with HSBC who use Resource Solutions (previously worked their under LTD but no longer an option obviously). They seem to have 5 Umbrellas on their PSL. As is typical with RS there is very little information provided to help you decide which one to use. I've tried trawling through the websites of the Umbrellas but they give scant information on what pension arrangements are available if any.

My main criteria is that there is a pension scheme that I can contribute the max HMRC annual allowance into (£40k). Does anyone have any knowledge of the following Umbrellas? (TBH I would prefer to contribute into my own SIPP but from what I understand, Umbrellas will only do salary sacrifice into their own schemes).

- Sterling - use NEST
- Ship Shape Pay - no pension scheme?
- Liquid Friday - use Now:Pensions
- Liberty Bishop (website keeps falling over so doesn't bode well) - think they use NEST
- Danbro - have their own scheme

Supplementary question: If using an Umbrella pension scheme, has anyone had any luck moving it in tranches into your SIPP? I would be interested in doing this if the umbrella scheme did not meet my investment needs.

Many thanks

[lucyclarityumbrella]

Hi CandiceMarie

First of all, if ShipShapePay do not have a pension scheme (and I say if), then steer clear. As an employer the umbrella company MUST auto enrol their employees into a pension, that's just law. I don't believe there are many of us that offer the max pension option to contractors, which is frustrating when you are pushed down the PSL route.

The only other advice I can give is that when it comes to NEST there are no exit fees, so when you have finished the assignment with the umbrella you are free to move to your personal pension cheme - but check whether you incur costs that end.

If you fancy putting in a good word, I am more than happy to speak with RS

[DolanContractorGroup]

Hi CandiceMarie,

We're hearing a few contradictory stories from sources regarding how Resource Solutions/HSBC are going to deal with workers found inside-IR35.

Interestingly, from the companies you've mentioned, not all are FCSA members which is a common prerequisite these days.

As an aside, we are FCSA members and do offer max pensions with Scottish Widows, and there's no penalties for moving funds out.


Thanks

Zeeshan

[CandiceMarie]

Thanks - I'm still waiting for HR to get back to me with details of the contractual arrangements (last contract was also with HSBC but it was via LTD). I'm not clear whether Resource Solutions or some other agency will run it as a PAYE fixed term contract or whether I will be forced to go via an umbrella (have assumed the latter unless I hear otherwise).

Refreshing that Contractor Umbrella uses Scottish Widows pension scheme - most umbrellas seem to use NEST which for me is a fairly rudimentary and unsophisticated pension scheme. Personally I'd rather salary sacrifice direct into my SIPP but understand that nobody is doing this. I also note that the NEST management charges were quite high compared to my SIPP (a contribution charge of 1.8% plus 0.3% annual management charge... daylight robbery!). Do you know what the Scottish Widows charges are?

[DolanContractorGroup]

Hi CandiceMarie,

There is an annual management charge of 1%. I couldn't see anything in the guidance about a contribution charge.


Thanks

Zeeshan

[lucyclarityumbrella]

Refreshing that Contractor Umbrella uses Scottish Widows pension scheme - most umbrellas seem to use NEST which for me is a fairly rudimentary and unsophisticated pension scheme. Personally I'd rather salary sacrifice direct into my SIPP but understand that nobody is doing this. I also note that the NEST management charges were quite high compared to my SIPP (a contribution charge of 1.8% plus 0.3% annual management charge... daylight robbery!). Do you know what the Scottish Widows charges are?

As Zeeshan said the Scottish Widows annual management charge is 1%, and from what I remember the investment charge was 0.2%.

[DolanContractorGroup]

Hi Lucy

I just clarified this with Scottish Widows and they advised that the AMC is 1% and there is no contribution/investment charge.


Thanks

Zeeshan

[CandiceMarie]

Thanks for confirming. So still quite expensive compared to a SIPP (my platform fee + fund management charge circa 0.5% in total). Looks like contractors are going to be paying a hefty price for using an umbrella pension scheme on top of all the extra tax... I'm beginning to think that it's just not going to be worth it unless rates go up and umbrellas start offering better value services.

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