In recent months, we’ve seen quite a lot of contractors switching from trading through a Limited company to being employed by an umbrella company. One consequence of this is that we’ve received more enquiries about pension provision, which is a subject most contractors will need to tackle at some point. In this article we’ll look at how umbrella companies can help you to save for retirement.

Pension auto-enrolment

If you’ve done your research and followed best practice, you will have chosen an umbrella company who can be relied upon to follow the rules and do things properly. This means you will be automatically enrolled onto the umbrella company’s pension scheme, assuming you meet the qualifying conditions.

If you’ve already made your own pension provision, you may not want to join a pension scheme that someone else has chosen. Of course, once you’re enrolled you can always make the decision to opt out, but that doesn’t make it any easier to contribute to your chosen pension scheme.

If you already have your own pension

Just like any other employer, umbrella companies will make their own internal decisions about whether they’re willing to help you contribute to a pension scheme of your choosing, or if they will only make contributions to their own workplace pension scheme.

If you’ve chosen an umbrella company who are willing to help, it’s worth checking exactly how their contribution will work, and whether you’re able to contribute through salary sacrifice.

How salary sacrifice normally works

As the name suggests, contributing through salary sacrifice means you decide to sacrifice some of your taxable salary, and your employer makes a payment into your pension instead.  

You can expect income tax and employee national insurance to be reduced, along with any other deductions that are based on your taxable gross pay.

If you’re employed by Orange Genie

If you’re lucky enough to be employed by Orange Genie Umbrella, we can, of course, contribute to the pension scheme of your choice. You can set the contribution as a fixed amount and we’ll treat it as a 100% employer pension contribution.

If you have any questions or if we can help in any way, please call our expert team on 01296 468 483 or email info@orangegenie.com.