As a contractor, it’s likely you’re already aware that being employed by an umbrella company comes with a number of advantages. While there’s a good chance you’re familiar with what these advantages can bring to your working life, you might be wondering what sets one umbrella employer apart from the others. In today’s blog, we will be covering one of Parasol’s primary unique selling points – Pension top-ups.
What Makes Parasol’s Pension Top-Up Scheme Unique?
We understand that for many contractors, saving for retirement can seem daunting, particularly with a continuously varying or fluctuating income. At Parasol, we’ve set up a ‘private pension top-up’. This unique umbrella employment feature means we add at least 10.3% on top of any contributions you make to a private pension while you are signed up with us. If you’re looking for ways to boost your pension, this could be a great starting point.
How It Works
Each umbrella employee can choose to have a private pension, which they can then pay a certain amount of money into every month. As these contributions are taken from our invoice value, the taxable gross pay is reduced. This means the employee is paying less tax, and we are making a 13.8% saving on employer National Insurance costs at the same time. We then utilise this saving and add 10.3% to their contribution, and keep the other 3.5% for ourselves. It’s important to note we only keep this 3.5% up to a value of £100, after which point the employee gets all of the remaining relief we receive.
Example
Let’s say a contractor places £500 into their private pension with us each month. When Parasol takes that money off their gross pay, we end up having to pay £69 less in our total employer National Insurance costs. Of that £69, we take £17.50 to cover our costs, while the contractor gets the remaining £51.50.
Essentially, when the contractor pays £500 into their private pension, they end up adding a total of £551.50 into it.
What This Means for You
At Parasol, we are acutely aware that planning ahead for the future is not only important, it is also a necessity for many of our clients. Being part of Parasol allows you to benefit from significant top-ups to your private pension plan. In turn, this provides you with the means to build better financial security for your future.
Don’t have a private pension yet? No problem. Courtesy of Caroola Financial Planning, we can help with that too. To learn more, get in contact with our best advice team members.
