Pensions Where to Start

[Scrooge]

Cheers Red Onion I am Number 2 Umbrella

 

[RedOnion]

Cheers Red Onion I am Number 2 Umbrella

Perfect. And are you a director of the umbrella company?

 

[Scrooge]

Yes correct I am a director of the umbrella

 

[RedOnion]

Yes correct I am a director of the umbrella

Perfect. Just to be clear, from a pension perspective that's very different to being self employed.

Now, is the '80k wage' the gross amount that your company invoices the client?

There are 2 main benefits of going the executive pension route Vs say a Personal pension plan:
1. There is scope for much higher funding. However, you need to be realistic about how much you can afford to put in. Great benefit if you're trying to 'catch up' on pension funding.
2. The pension contributions are made by the company, not you. So in effect there's 52% tax relief, rather than 40%.

On the flip side, fees can be high for some products. They're not standardised like with a PRSA.

If you get a different job in future, you can leave the pension separate, or transfer into a company pension or PRSA. So don't put it off just because you might leave the contracting approach.

There are other contributors much better versed in pensions than I am, so I'll leave it to them now that we understand your circumstances.

 

[Scrooge]

OK apologies misunderstanding on my end on the whole Umbrella & self employed bit;

So my setup is as follows

I work for Engineering Company A Monday to Friday
I submit timesheets with my hours to Contracting Plus every two weeks (Accountant)
Contracting Plus then invoice a Recruitment Agency A.
Recruitment Agency A then invoice Engineering Company A
I then get a payslip from Contracting Plus and funds get transferred into my acccount.


A bit long winded but thats my setup.


If I did go Full Ltd is there any benefit froma pension perspective?

 

[RedOnion]

If I did go Full Ltd is there any benefit froma pension perspective?

Not really. Sorry I wasn't clear in earlier post - once you're a director of the company it gives you the option of an executive pension. That's why the companies that provide the umbrella structures give the director option.