From In-Portal Developers Guide

Strategies for Contractor Pensions

Consultants, freelancers and contractors will often be the past people in the market to benefit from financial services. Mortgages and pensions are often difficult to secure simply because design for employment from the contracting sector will not suit the factors set by most loan companies. This is an area that potential contractors should keep in mind before jumping into freelance employment. Nevertheless these day there are numerous contractor pensions in the marketplace that are worth consideration. Unfortunately, most freelancers and contractors let it sit too late to take into account their pensions. Alternatively there are a lots of contractors that have pensions but haven't maximised their total allowance for investments. This document will mention how contractors will make probably the most of contractor pensions currently available on the market.

The first thing to note is merely how important pensions will be to the contracting sector within a post IR35 world. For the sector containing felt under-appreciated and over-taxed in recent times, Contractor Pensions remain one of the few regulations ready to accept contractors. It is because it is possible to invest from company accounts, thereby circumventing not only taxation but in addition employer and employee NI contributions. The pension funds then remain tax-free.

For individuals researching pensions there are two main options. They may be Personal (or Stakeholder) Pensions and Executive Pensions. Personal pensions are the most frequent and utilized by most of the people. You are able to pay in approximately ?300 per month irrespective of your salary. They are considered personal pension plans but contractors should fund them using their Limited Company.

Executive Pensions however are prepared for businessmen that run their unique Limited Companies and still have higher allowances, set from the Inland Revenue to include marital status, previous pension background and just how long using the Limited Company. These Executive Pensions do allow for higher allowance thresholds but they are associated with your Limited Company.

No matter what, it is important to avoid providers who view such contractor pensions like a niche product and for that reason charge additional money. As a result, seek out companies who don't charge the earth to create the pension. They should be funded via employer contributions from a gross contract, reap the benefits of 39% relief and have small, if any, set-up costs. Search for other features including penalty free payment holidays and also the power to move the pension around.