Umbrella Companies and NEST vs Worksave

bluffer

Hi Folks.


Bit of background first of all. Ive been a contractor for about 4 years but because of breaks in contracts and different employers have decided to stay umbrella rather than Ltd.


My last umbrella company allowed me to contribute to a L & G worksave pension set up under a previous employer and set the contribution level. But a couple of months ago they were bought over by a larger umbrella company who are now saying they cant pay into my worksave pension but i have to use NEST. As well as that I can only contribute THEIR standard rate of 2.4% not the 12% I want to pay. Total balance is about £35k L&G, £500 NEST



I know different companies have different ways the pension is set up so although NEST is not ideal, I would be getting them to pay into an account already set up. They say, if I want to pay more I have to contact HMRC.



Can they deny me the chance to pay more?



If yes, what is the best way to pay the extra and to who Nest or L&G?


Thanks

Linton

You can set up a personal pension completely separate from your umbrella employers scheme and directly pay into it from your taxed income - there is no problem with paying into multiple pensions.. HMRC will refund the basic rate tax you have paid on the money into the pension.

dunstonh

Simplest option is to use an individual scheme for any excess you want to pay.

If yes, what is the best way to pay the extra and to who Nest or L&G?

Personally neither. However, whichever you prefer. Its a bit like asking which is best between Tesco own label and Sainsbury own label.

londoninvestor

Linton wrote: »

You can set up a personal pension completely separate from your umbrella employers scheme and directly pay into it from your taxed income - there is no problem with paying into multiple pensions.. HMRC will refund the basic rate tax you have paid on the money into the pension.

That's true and probably best in the circumstances - but unfortunately for the OP doesn't have the NI benefits of the umbrella company paying in direct. (I assume they paid out of the OP's invoiced rates, before paying salary, so it would save both employer's and employee's NICs.)

bluffer

thanks for the replies so far.


My gut feeling is to stick with the NEST so at least I do get their 2%, better than nothing. Yes, the pension did come out of invoiced rates. ( presume the NEST will do the same but is due to start next month )



My only concern about setting up yet another pension is it would be my 6th pot between previous and current employers, also charges both setting up and ongoing.



As I wouldnt trust myself to pick individual stocks I would be going for funds rather than individual stocks but even there the choice is so vast I would probably go for a risk profile basket rather than pick them myself.


Can you suggest some sites to look at low cost pensions? Would the likes of the new entrants like Moneyfarm be worth looking at as well as the more traditional companies?


Cheers

GunJack

bluffer wrote: »

thanks for the replies so far.


My gut feeling is to stick with the NEST so at least I do get their 2%, better than nothing. Yes, the pension did come out of invoiced rates. ( presume the NEST will do the same but is due to start next month )



My only concern about setting up yet another pension is it would be my 6th pot between previous and current employers, also charges both setting up and ongoing.



As I wouldnt trust myself to pick individual stocks I would be going for funds rather than individual stocks but even there the choice is so vast I would probably go for a risk profile basket rather than pick them myself.


Can you suggest some sites to look at low cost pensions? Would the likes of the new entrants like Moneyfarm be worth looking at as well as the more traditional companies?


Cheers

Once you've set up the new pension, you could start looking at transferring the others (other than the current works one) into the new one to rationalise the pots...would certainly be easier to keep track of, and with the right new one, save you on charges over the many existing ones...maybe have a chat with a local IFA?

dunstonh

My only concern about setting up yet another pension is it would be my 6th pot between previous and current employers, also charges both setting up and ongoing.

10 pensions charging say 1% a year is the same as 1 pension charging 1% a year. However, given your quantity, it may make sense to consolidate some or all of them.

As I wouldnt trust myself to pick individual stocks I would be going for funds rather than individual stocks but even there the choice is so vast I would probably go for a risk profile basket rather than pick them myself.

or use an IFA

Can you suggest some sites to look at low cost pensions? Would the likes of the new entrants like Moneyfarm be worth looking at as well as the more traditional companies?

DIY is fine but you need to know what you are doing. If you are considering Moneyfarm then you would be better off using an IFA.

bluffer

thanks all. will have a serious think.