Why am I automatically enrolled in a pension scheme with an umbrella company?

As your employer, an umbrella company must legally enrol you into a workplace pension scheme. Continue reading to discover why you are automatically enrolled in a pension scheme with an umbrella company and how pension deductions work.

Why am I automatically enrolled in a pension scheme with an umbrella company?

All employers in the UK must provide a workplace pension scheme. All eligible employees will be enrolled in the workplace pension scheme – this is called automatic enrolment. A workplace pension is a way of saving for your retirement that your employer arranges. A percentage of your pay is automatically put into the workplace pension scheme every time you are paid.

You may also get tax relief from the government on contributions made to a workplace pension. The tax relief will get added automatically, or you’ll have to claim it yourself. It depends on the type of pension scheme you’re in and the rate of Income Tax you pay.

If you are a client of Churchill Knight Umbrella, our chosen pension provider is Smart Pension. For more information, please visit Smart Pension’s website.

How do pension deductions work with an umbrella company?

Making pension contributions to a workplace pension provider is a straightforward way to save for retirement. Once enrolled, pension contributions will automatically be deducted from your wages each time you are paid. The pension contributions are then sent to the pension provider. Most umbrella companies will follow the minimum pension contribution amounts set by the government, which is 8% (3% employer and 5% employee).

If you would like to use the umbrella company’s workplace pension scheme, always ensure the pension deductions are included in the take-home pay illustration to get an accurate idea of what your take-home pay could be before registering.

Can I opt-out of contributing to a pension scheme when using an umbrella company?

Yes – if you do not want to contribute to your umbrella company’s chosen workplace pension provider or you have another pension in place, you can opt-out. Please note that you cannot opt-out until you have been enrolled in the workplace pension scheme. To opt-out, please get in touch with your workplace pension provider.

If you are an employee of Churchill Knight Umbrella and would like to opt out of the workplace pension scheme, please get in touch with Smart Pension.

Request a tailored take-home pay illustration

If you want to register with an umbrella company and learn how pension deductions work, please request a tailored take-home pay illustration. Our expert Sales Consultants will explain how workplace pensions work with an umbrella company and answer any questions about our umbrella service. For more information or to register with Churchill Knight Umbrella, please call 01707 871622.