How to conduct due diligence on umbrella companies

Salary sacrifice means agreeing to reduce your salary by a set amount in exchange for pension contributions. While this can bring significant tax savings, it may also affect:

• Mortgage or loan applications
• Statutory benefits (e.g., maternity or shared parental pay)
• Insurance policies (e.g., life cover, income protection, mortgage protection).

We strongly recommend speaking with a pension or financial advisor before making changes.

If you're unsure, a financial advisor can help you decide what works best. A good starting point is to contribute at the lower end of your budget, ensuring you make the most of available tax reliefs. You can always top up your pension later with personal contributions.

We are required to pay you at least National Minimum Wage (NMW) and holiday pay, so pension contributions can only come from your commission. As working hours and pay can vary, we calculate the contribution based on one working day to stay compliant.

This refers to Employer's National Insurance (NI) savings. When your gross pay is reduced by pension contributions, the employer's NI liability also drops. We pass that saving back to you as additional gross pay. Note: This extra pay is still subject to income tax and employee NI.

Adjusted income includes your total taxable income:

• Salary
• Bonuses
• Commissions
• Dividends and rental income
• Savings interest
• Plus any employer pension contributions

If your total pension contributions exceed your annual allowance, you’ll face an annual allowance tax charge on the excess. Always factor in all pension contributions (not just those through your umbrella provider), and consult your pension advisor.

Yes, you can choose to stop your salary sacrifice at any time. Your gross pay will be adjusted accordingly. To stop, contractor.support@focusedgroup.co.uk - we’ll issue a revised agreement for your records. However, if you stop, you won’t be able to restart until the next tax year (beginning 6th April).

Absolutely. If your circumstances change, just contact our team and we’ll help you update your contribution amount.

Anyone earning above the National Minimum Wage can participate in salary sacrifice.

Pensions offer significant tax advantages that regular savings accounts don't. While savings accounts may offer easier access, they are subject to tax on interest and can be eroded by inflation over time.

Pensions, on the other hand, benefit from:

• Tax-free contributions (within allowances)
• Employer contributions
• Tax-free investment growth

For long-term saving, pensions are often a more efficient and rewarding option.