It’s Pension Awareness Week!

In the ever-evolving landscape of employment, the rise of umbrella contracting has provided workers with increased flexibility and opportunities. However, in the midst of juggling various assignments and clients, it can be easy to overlook the importance of pension planning. 

In this blog, we want to mark Pension Awareness Week by sharing valuable insights into how pensions work under an umbrella company and why it’s so important to save for your future. 

How do pensions work as an umbrella contractor? 

Just like most employers in the UK, your umbrella will automatically enrol eligible workers in a workplace pension scheme. This means your umbrella company will make pension contributions on your behalf (you will see the deductions on your payslip). 

You will also be given the option to ‘opt out’ of the pension scheme if you so wish. However, we highly recommend putting away a personal pension should this be the root you choose. Plus, you won’t gain the same benefits, such as tax relief – which we explain in more detail in this blog. 

Why is pension awareness important? 

Firstly, we all know saving for the future is key for ensuring financial stability and a smooth sailing retirement. However, this can be difficult to guarantee as someone who is self-employed as in most cases, you are responsible for putting that money aside (which might be tempting to dip into it for treats now and again!). Hence, working through an umbrella is beneficial as pension schemes are almost always part of the deal. 

We always recommend checking your payslips each month to ensure that everything looks ‘right’ (i.e. no nasty surprise deductions or suspiciously high take-home compared to the previous month). These can be an indication that your umbrella of choice is non-compliant. 

As part of this routine, you should also be checking your pension deductions are as you expected – plus it’s good practice to know how much of your salary is going where so you can plan your monthly finances. 

When starting with Mint Umbrella, we will provide you with a pay illustration so you can get a rough idea of what your take-home pay will look like. 

Mint Umbrella is Professional Passport approved and strives to provide a brolly service that makes busy contractor lives that little bit easier. Get in touch via 0203 967 6846 today to learn more about working with us!