Umbrella Employee Pensions (April 2019 onwards)

The Government increased the minimum pension contributions that must be paid in to your workplace pension scheme from April 2019 to comply with Auto Enrolment. This also applies to umbrella employee pensions.

So what changed in 2018 to 2019? The total minimum contribution increased to 8%. These contribution rates apply to most umbrella employees. They will apply to band earnings, which are earnings between £6,136 and £50,000.

Your Employer PaysYou PayGovernment Pays
From April ’193%4%1%*
From April ’193%5%N/A (Clarity Pension scheme is operated via salary sacrifice, so tax relief is applied at source not once it hits your pension pot) **

*The Government contribution is in the form of basic rate tax relief, currently at 20%.

Most workers in the UK, including those operating via an umbrella company, are automatically enrolled into a workplace pension scheme by their employer. From the date their automatically enrolled they have a month to ‘opt-out’. If they do nothing they’ll be enrolled in the scheme. They’ll make contributions to their retirement pot from their pay for as long as they’re employed or until they take their money out.

Workers and employers can both contribute into the pension to build a retirement pot that’s invested on behalf of the worker. Workers who earn over a certain amount are entitled to a minimum contribution into their pot when they’re paid.

** The Clarity Umbrella Scheme is operated as a salary sacrifice scheme and as such, even under the auto-enrolment figures, we take the 8% and the tax relief is applied at source rather than the government applying the tax relief once it hits the pension fund.

Find out more about our Employee Pension Scheme options.