Parasol Pensions and Take Home

[crimsonfin]

Hi

Just started contracting, using Parasol and am looking for some advice from anyone out there who has been in the same boat to increase my take home pay.

I am currently working a contract at £185 a day and have been using the calculator on the No Longer Limited website to try and increase my take home pay.

My (weekly) calcs are as follows

• Invoice £925 a week
• £35 petrol expenses
• £0 pension
• Take home approx £593

Now assuming I make a pension contribution (I believe that Parasol force you to use their own Pension scheme) of £40 a week my take home jumps to approx £622

Maybe im being thick but how can paying £40 a week into a pension increase my take homw by about £30 ?

Any thoughts welcomes.

Cheers

[expat]

Hi

Just started contracting, using Parasol and am looking for some advice from anyone out there who has been in the same boat to increase my take home pay.

I am currently working a contract at £185 a day and have been using the calculator on the No Longer Limited website to try and increase my take home pay.

My (weekly) calcs are as follows

• Invoice £925 a week
• £35 petrol expenses
• £0 pension
• Take home approx £593

Now assuming I make a pension contribution (I believe that Parasol force you to use their own Pension scheme) of £40 a week my take home jumps to approx £622

Maybe im being thick but how can paying £40 a week into a pension increase my take homw by about £30 ?

Any thoughts welcomes.

Cheers

The result on the calculator is not called "take home". It is called "Net Return (Incl. Pension)"

[DimPrawn]

It's increases your take home, but the downside is:

1. You are forced to use their pension. That must be illegal surely?
2. You can't take the money home until you are 55 at least, and then only 25% of it as a lump sum.

Overall, you need your own ltd and a better paying contract.

[original PM]

Take home approx £593

Now assuming I make a pension contribution (I believe that Parasol force you to use their own Pension scheme) of £40 a week my take home jumps to approx £622

You need to double check that quote - you will probably find that your net return may be £622 - but £40 of that will be going to a pension.

so in your pocket will go £582 and £40 will go to your pension (although those figures look a little to high)

The reason for this is that they can take your pension contribution prior to tax and NI deductions thus reducing your taxable pay and increasing you overall return.

You can use any pension you wish however Parasol will only make the payment from your gross pay (e.g. before deductions) to a certain pension. (in essence this is no different to any other company - you can have which ever pension scheme you want but if you wanted to join the company pension scheme and obtain any benefits you would not have a say in who the pension provider was)

[crimsonfin]

...£40 of that will be going to a pension.

Ahh, that makes sense now. Thanks.

Next task is to start looking into the parasol pension scheme to see if its any use.

[HermanDune]

I don't want a Parasol pension!

I'm with Parasol but I would like more choice. This news has made me more likely to consider setting up as ltd. I have not been able to pay into a pension due to low contract rates (£15/hour previously) and a massive debt burden!

[Troll]

Bollux to pensions managed by others