Hi, I've been auto-enrolled into the NEST pension scheme by my umbrella company. I pay 5% of my qualifying earnings, and my employer pays 3%.
On my payslip, I can see that the 3% my 'employer' pays comes out of my total umbrella income (my day rate x the number of days worked) along with the employer's NI.
The 5% then comes out of my gross salary, along with tax and normal (employee) NI.
Is this correct? I understand I have to pay employer's NI but was surprised to see the employer's pension also coming out of my day rate.
I'm a higher rate taxpayer and I've just opened a SIPP, so I was thinking of opting out of NEST and contributing to the SIPP instead. But some documents suggest I'd lose my employer contributions if I opt out. But if I made the contributions, surely they couldn't keep them? All very confusing!
I also don't think I'm getting higher rate tax relief on my NEST pension and not sure if this is even possible (hence opening the SIPP, as I know I can get tax relief on that). Salary sacrifice is not currently an option.
Any steer on any of the above would be appreciated.
On my payslip, I can see that the 3% my 'employer' pays comes out of my total umbrella income (my day rate x the number of days worked) along with the employer's NI.
The 5% then comes out of my gross salary, along with tax and normal (employee) NI.
Is this correct? I understand I have to pay employer's NI but was surprised to see the employer's pension also coming out of my day rate.
I'm a higher rate taxpayer and I've just opened a SIPP, so I was thinking of opting out of NEST and contributing to the SIPP instead. But some documents suggest I'd lose my employer contributions if I opt out. But if I made the contributions, surely they couldn't keep them? All very confusing!
I also don't think I'm getting higher rate tax relief on my NEST pension and not sure if this is even possible (hence opening the SIPP, as I know I can get tax relief on that). Salary sacrifice is not currently an option.
Any steer on any of the above would be appreciated.
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