Employer contribution to SIPP

littld

I don't have access to a workplace pension, don't want one and wouldn't join it if it was there.

I do have a SIPP, however. The SIPP provider says my employer can contribute to it.

I'd like to get my employer to pay more into my SIPP and in return I'd be happy to take a pay cut.

Any issues with doing this and does anyone know how it would affect tax/NICs? If it benefits my employer as well as me then that's a good thing.

Thanks

xylophone

https://forums.moneysavingexpert.com/discussion/5490672

Wouldn't it be easier all round for your employer to set up a scheme with salary sacrifice?

https://www.moneyadviceservice.org.uk/en/articles/salary-sacrifice-schemes

You could explore transferring the pension to your SIPP if you left the company.

littld

xylophone wrote: »

https://forums.moneysavingexpert.com/discussion/5490672

Wouldn't it be easier all round for your employer to set up a scheme with salary sacrifice?

https://www.moneyadviceservice.org.uk/en/articles/salary-sacrifice-schemes

You could explore transferring the pension to your SIPP if you left the company.

Thank you. There are 2 employees, I am one of them. I'm trying to keep it simple and just use the SIPP I've already got. I don't want the employer having to pay an employment organisation money to set up a scheme for 2 employees, of which one (me) would use.

Do you think it could be kept simple?

dunstonh

I don't have access to a workplace pension, don't want one and wouldn't join it if it was there.

That is very short sighted. Turning down free money doesnt seem sensible.

I'd like to get my employer to pay more into my SIPP and in return I'd be happy to take a pay cut.

Any issues with doing this and does anyone know how it would affect tax/NICs? If it benefits my employer as well as me then that's a good thing.

1 - your employer doesnt have to. It would be voluntary.
2 - they would not be required to match the auto-enrolment options as you would be an opt-out
3 - your pension provider may not accept contributions from you as you would be classed as an opt out and that is a high risk individual in regulatory terms. Some providers will not accept opt outs without an adviser being involved.

I'm trying to keep it simple

Join the auto-enrolment scheme then. Cant get more simple than that. It may not be there yet but there isnt much time left.

I don't want the employer having to pay an employment organisation money to set up a scheme for 2 employees, of which one (me) would use.

There is more admin and hassle in what you want to do.

Do you think it could be kept simple?

yes if you let the employer set up an auto-enrolment scheme.

xylophone

I think the employer will be required by law to set up a scheme.

See links above.

https://www.gov.uk/workplace-pensions/about-workplace-pensions

http://www.scottishwidows.co.uk/extranet/literature/doc/FP0349 may be worth a browse.

littld

So reading between the lines I will keep a SIPP but both me and the employer continue to pay NICs on the contributions.

Meanwhile the employer has to set up a scheme that both employees will opt out of.

What a waste!

zagfles

littld wrote: »

So reading between the lines I will keep a SIPP but both me and the employer continue to pay NICs on the contributions.

Meanwhile the employer has to set up a scheme that both employees will opt out of.

What a waste!

Not necessarily - ask your employer if they'll contribute to the SIPP, and ask your pension provider if they'll accept employer conts if you opt out. Then you and employer save NI as well as tax.

Alternatively, you could use your employer's AE scheme and, if the scheme allows it, periodically transfer to your SIPP.

littld

Many thanks, I think they'll be okay with that. It does look as though they have to pay to set up an AE scheme which then no-one will use but I guess that's unavoidable.

neilvw

If they use NEST there's no charge to the employer.

PaulCooper

I had no problem with my employer paying pension contributions via salary sacrifice into my SIPP, to keep things simple we agreed a one off payment per year. Worked for me.
It probably wouldn't work for a large employer, it wouldn't be worth their hassle
Paul