Umbrella companies and pension providers

[Silverskin]

Changing contributions is easy. If its self administered you just change it on the portal. I believe with Clarity offering you just advise them and they'll change it there and then. I'd imagine the others are similar if they allow unlimited payments.

Thanks

[zcapr17]

Well exactly, I don't see how the umbrella company can have an issue with carry forward but apparently some do. Maybe someone else is able to comment on this?

Brookson won't do carry forward, they only want to let you contribute up to £40k/yr, but then they won't allow contributions to your own SIPP either.

[zcapr17]

Hi,
does anyone know from that list of umbrellas which ones don't allow carry forward for the SIPP contributions? I'm particularly interested in Nasa and Paystream in this respect.

Also does anyone know how easy it is to change your SIPP contribution during the tax year, should the need arise? How does that work if you lose your job for example?

I'm looking for an umbrella that will be reasonably flexible in changing pension contributions, for example on a quarterly basis, and it does seem there are significant differences in the stance each umbrella is taking on this point.

I've only been looking at a limited subset of the list, due to my agency restricting the umbrellas they will work with. However, I can report that Paystream will let you pay into your own SIPP, and use carry forward, BUT they told me they would only let me alter my contribution rates once per year! They seemed very touchy when I pressed them on this point. I can understand they want to avoid extra administration, but this is a red flag for me.

In contrast, Giant will also let you pay into your own SIPP, and use carry forward, and seem a bit more flexible about changing contribution rates, saying "it's up to the pension provider".

Some others have indicated that changing contributions every quarter is reasonable, but they won't entertain changing them more frequently than that.

In conclusion, before signing up with an umbrella, you definitely want to confirm your specific pension arrangements including how often they'll let you change the contributions (maybe also the scheme too).

z.

[Paralytic]

Well exactly, I don't see how the umbrella company can have an issue with carry forward but apparently some do. Maybe someone else is able to comment on this?

Apparently? Says who? I've not seen any record of that here?

Some may not allow salary sacrifice, some may want to limit how much you can salary sacrifice, but they simply cannot know (unless you tell them) what your current allowance is.

Even if they think that maxing out your contribution at £3333/month stops you using carry-forward, it does not - you could have made contributions elsewhere for the current tax year.

[Paralytic]

Brookson won't do carry forward, they only want to let you contribute up to £40k/yr, but then they won't allow contributions to your own SIPP either.

How do they know you've not already contributed £40K this year and the £40K you're now contributing via them is actually a carry forward?

A more correct statement would be: Brookson limit your contributions to £40K/year.

[eek]

How do they know you've not already contributed £40K this year and the £40K you're now contributing via them is actually a carry forward?

A more correct statement would be: Brookson limit your contributions to £40K/year.

Not quite, a more correct statement is that you can’t carry back on a brooks on pension as you only joined it this year.

Thd (previous) additional payment into your Existing scheme would be the carry forward from a Previous year

sorry for the caps - stupid phones

[swathingmold]

Trying to understand salary sacrifice options

Thanks all for providing insight.
Sorry I may just repeat the question here again, but this is really confusing. I will put down my situation and if anyone can help by suggesting, that will be really appreciated.

- I have a NEST pension (salary sacrifice) account from July 2018 but I haven't been contributing anything to it.
- I have a AEGON personal pension account since April 2015 and have been contributing £300 a year.

Now I will have a contract inside IR35 from 6th April 2020. This is what I want to do -

- Contribute using salary sacrifice for year 2020/2021 and I have been told by AGEON and Scottish Widows that I will need a financial adviser to open a new account for salary sacrifice?

- Contribute for previous 3 years, if my earning allows (after taking the minimum recommended by umbrella company) as a salary sacrifice. I am hoping I can do it as I had a pension account all the time.

- So to give a rough idea - can I contribute 40K (for 2020/21) + 39.7K (for 2019/20) + 39.7K (for 2018/19) + 39.7K (for 2017/18) = total = 159K (approx)
So every month = 13250 approx, if I am earning lets say 15000 every month or I have got everything wrong here?

Thanks a lot for your help.

Rega

[BABABlackSheep]

I'm looking for an umbrella that will be reasonably flexible in changing pension contributions, for example on a quarterly basis, and it does seem there are significant differences in the stance each umbrella is taking on this point.

I've only been looking at a limited subset of the list, due to my agency restricting the umbrellas they will work with. However, I can report that Paystream will let you pay into your own SIPP, and use carry forward, BUT they told me they would only let me alter my contribution rates once per year! They seemed very touchy when I pressed them on this point. I can understand they want to avoid extra administration, but this is a red flag for me.

In contrast, Giant will also let you pay into your own SIPP, and use carry forward, and seem a bit more flexible about changing contribution rates, saying "it's up to the pension provider".

Some others have indicated that changing contributions every quarter is reasonable, but they won't entertain changing them more frequently than that.

In conclusion, before signing up with an umbrella, you definitely want to confirm your specific pension arrangements including how often they'll let you change the contributions (maybe also the scheme too).

z.

This is interesting as I've decided to go with paystream for the SIPP reason(posted on another thread) and they didn't mention I could only change my contributions once a year. In fairness I didn't ask this question, only that I would wait a couple of weeks before deciding on the levels to contribute. I will check with them.

I want my SDC decision first as well, as obviously if I can claim mileage it gives me more revenue..not holding my breath though as its Inside IR35 and it seems the SDC questions are very similar to the CEST

[zcapr17]

How do they know you've not already contributed £40K this year and the £40K you're now contributing via them is actually a carry forward?

A more correct statement would be: Brookson limit your contributions to £40K/year.

Ah yes, I see what you mean now. Good point, well made.

It does make me wonder, most pension providers don't seem to stipulate any limit to contributions, so it would seem very easy to exceed the annual pension contribution limit. Presumably HMRC get some kind of reporting from pension operators and will eventually come after you at some point if you've exceeded the limits...?

[zcapr17]

Not quite, a more correct statement is that you can’t carry back on a brooks on pension as you only joined it this year.

Thd (previous) additional payment into your Existing scheme would be the carry forward from a Previous year

I don't believe this is correct. So long as you've been a member of a registered pension in the years you want to 'carry forward' the unused allowance from, you can use that carried forward allowance to pay into any pension you have now - it's doesn't have to be the same one.

Quote from my pension provider:

To use carry forward you need to have had a SIPP or other type of pension in place in each of the three years. But you don’t need to have made any contributions and your new contribution does not need to be paid into the same pension.

E.g. you could open a brand new pension today and immediately pay £160k into it, so long as you've been a member of another pension scheme for the last three tax years and haven't made any contributions.