New employer not offering a pension, so...

jdw2000

Good morning all. I have few questions...

A prospective new employer of mine is offering a salary of £45K basic. It's a company which has been going for over 10 years, but has less than 10 staff, I believe.

I just checked, and they are not offering a pensions at this point in time.

Questions:

1) Is not offering a pension allowed at the moment for this type of company?

2) If I pay money into my own SIPP, would it be tax free, as it would be with an employer pension?

3) If the payments to my SIPP are not tax free, then this will make the £45K non-tax efficient. I will be getting charged 40% tax on the £10K of money above £35K. What can I do about this?


This does surely make it far less attractive than a job which has even a small contributory pension scheme?

Asghar

Just to clarify that without any employee pension payments from your payslip you will only be paying 40% tax on £2000 of your yearly income.

The basic rate of tax is up to £43,000 at 20%.

jdw2000

Asghar wrote: »

Just to clarify that without any employee pension payments from your payslip you will only be paying 40% tax on £2000 of your yearly income.

The basic rate of tax is up to £43,000 at 20%.

Oh, OK. Cheers for that. I thought it was £35K.


Well that makes it a bit better then.

atush

Plus, they will probably start a pension scheme later this year. Pretty sure a 10 yr old company with 10 employees would have a staging date soon. You could ask them their staging date, and if they have decided what they will contribute.

Probably wouldnt hurt to start a sipp right now (yes you get TR) anyway, if yu have a good cash emergency fund. Otherwise, start a S&S isa.

jdw2000

atush wrote: »

Plus, they will probably start a pension scheme later this year. Pretty sure a 10 yr old company with 10 employees would have a staging date soon. You could ask them their staging date, and if they have decided what they will contribute.

Probably wouldnt hurt to start a sipp right now (yes you get TR) anyway, if yu have a good cash emergency fund. Otherwise, start a S&S isa.

Yes, I have a SIPP already set up which I would like to pay into eahc month.

So I can pay into that, tax free, direct from my pay packet without paying tax on it? Even if my employer has no pension set up?

atush

No, you pay tax on it, pay it into the Sipp, and the Sipp company gets the tax back for you.


You may want to keep paying in, even after the company pension is set up- esp if they are only putting in 1% etc.

xylophone

http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx

What is your employer's situation with regard to automatic enrolment?

jdw2000

xylophone wrote: »

http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx

What is your employer's situation with regard to automatic enrolment?

Will check, but not sure.

Thanks.

atush

More or less what I alluded to in post 4. You need to ask?