Pensions – planning for your future

Pensions – planning for your future

Noone wants to think about getting older but pensions planning for the future is vital for making sure you’re in a good position when you’re ready to retire. We all want a retirement we can enjoy without financial worries.

One of the benefits of working through an umbrella company is access to workplace pensions. A workplace pension means you’ll contribute to your pension each month and so will your employer. You’ll also benefit from tax relief on these contributions.

As a contractor, you can work on many assignments through many different agencies. This can be tricky with you ending up with a number of different pensions pots. But working through an umbrella company means you’ll only have one employer, and therefore, you’ll only have one pension pot. This is one of several ways that working through an umbrella company can simplify your finances and make them more efficient and transparent.

Pensions can seem really confusing so we’ve covered some of the basics here.

Do you have to join?

In 2012 the UK Government introduced new legislation making it compulsory for employers to provide a workplace pension for their employees. The process started with the country’s largest employers in October 2012 and continued until 2018, when all UK employers were included.

The aim is that all employees should have access to a workplace pension scheme, and this means that we must automatically enrol all employees into a pension scheme.

As a Husp employee you’ll be automatically enrolled into a pension scheme, if you’re:

  • aged between 22 and State Pension Age;
  • earning over £10,000 a year (£833 a month/£192 a week) ;
  • working, or ordinarily working, in the UK;
How much will you have to save?

You have to save a minimum of 8% of your qualifying earnings into your pension pot each month. This includes three elements:

  • The employer contribution which is covered by the employment costs the umbrella company pay on your behalf (3%)
  • your personal contribution (4%)
  • tax relief (1%)
Can you opt out?

Whilst workplace pensions are one of the benefits of working through an umbrella company, it’s possible that the scheme your umbrella company is offering isn’t right for you. If this is the case, you should feel free to make your own arrangements. Your employer has a legal obligation to enrol all qualifying employees, so once you meet the criteria, they will have to enrol you, but you can opt out within 30 days of enrolment.

If you do opt out it’s really important you make sure you have an alternative pension plan in place. The earlier you start saving, the more time you have to build up a good income for your later years.

FCSA Accredited Member

FCSA Accredited Member

We are really pleased to be able to announce that we have now been fully accredited by the Freelancer and Contractor Services Association (FCSA) for our umbrella services.

We have always kept the needs of our contractors front of mind in designing and operating our umbrella services, as well as ensuring that we are operating in a totally compliant and ethical way. This accreditation is a real endorsement of the work we have done since our launch at the beginning of the year.

Being FCSA accredited gives all of our contractors, their agencies and end clients the reassurance they need that we are handling everything effectively for them – as we have always committed to doing. So, they can go on doing what’s most important… focusing on their contract.

I’d like to say a huge congratulations to our team here who have all worked incredibly hard to achieve this and we look forward to working with the FCSA for many years to come.

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Contracting in 2020

Contracting in 2020

Contracting in 2020

As we move into the new year, we know that the contracting market is facing a significant upheaval in 2020 with the changes to the IR35 legislation which come into effect from April. The legislation is designed to determine if contractors are genuinely self-employed or acting more like an employee and ensure that they are paying the appropriate tax and national insurance based on the way they are working. There is, unsurprisingly, uncertainty about how the changes will land and what the ‘new normal’ of contracting will look like once the dust settles.

Jay Gadher, Operations Director at Husp
Jay Gadher, Operations Director at Husp
What are the IR35 changes?

The change itself is relatively simple – the responsibility for determining the IR35 status of contractors working through personal services companies (PSCs) for tax purposes is moving from the contractor to the end client. It sounds simple, but it is likely to have far reaching consequences.

What does it mean for end clients?

Many of the businesses who use large numbers contractors are facing a significant increase in administration costs as they will need to carry out an individual assessment for every contracting role they recruit for, to assess whether it is within or outside of IR35.

The alternatives are to stop using contractors altogether, to only work with contractors who are employed via an umbrella company where IR35 doesn’t apply or to employ people directly through fixed-term contracts.

What does this mean for the market?

The expectation in the market is that many more roles will be deemed as inside IR35 than they are currently, as it is anticipated that end clients will see this as the lower risk outcome so will err on the side of caution when making their assessments.

As you would expect, contractors are having to make decisions about whether they wish to continue working in the same way with a reduced number of roles available, if they are happy to work in roles that are inside IR35 or if they are going to switch to an umbrella arrangement as the administrative burden of running a PSC starts to outweigh the benefits.

How will the market develop over the rest of the year?

The reality is that we don’t yet know what the split of roles will look like after the changes come into effect, and many businesses have yet to make decisions about the types of contractor they will engage with going forward.

It’s important to remember that decisions made now may not mean they won’t change in the future. If businesses find they are no longer able to attract the quality, experienced and skilled contractors they rely on, they may need to reassess how they operate going forward to make sure they continue to attract the right talent.

Umbrella companies are likely to increase in prominence, providing the reassurance to both contractor and end client that all legal obligations are being met compliantly and removing the administrative burdens from both sides. For more specialist contractors, the market is likely to become a more flexible place to work, with more emphasis on outcomes-based contracts where the focus in on output rather than process. Increased flexibility of location and time would move the market much more towards a freelance model.

As we near the end of the year, we will start to see the new status quo emerging. The fundamental requirement for a flexible workforce, however, remains and the market is expected to continue to go from strength to strength as the changes embed and all those impacted adjust to the new landscape.

Umbrella company holiday pay

Umbrella company holiday pay

Umbrella company holiday pay

Whenever there is a holiday period coming up, you may well be thinking about the holiday you need to take to spend time with your family. Contractors can find themselves facing a period of no work and, therefore, no pay when the festive season approaches.

One of the great things about contracting through an umbrella company is that you’re entitled to 28 days paid holiday per year, just like all employees. Unlike holiday pay through standard employment, you have two options for how you receive your holiday pay.

Holiday pay for umbrella company contractors

Option 1: Holiday pay in advance

This is our default option and is what most people choose. You’ll be paid 12.07% of your pay as holiday pay each month in advance of you taking holiday. This means when you do take holiday you won’t get any additional pay.

Option 2: Accrued holiday pay

You can choose for your holiday pay each month to be put aside in a separate pot. You can claim from this pot when you need to take leave. It’s your money to claim whenever you need it.

Some umbrella companies will only offer one of these options, so it’s important you check what’s available and whether you can change your mind before choosing your umbrella company.

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The future of flexibility

The future of flexibility

The future of flexibility

Jay Gadher, Operations Director at Husp

Jay Gadher, Operations Director at Husp

Jay talks about the changing shape of the flexible workforce. What does flexibility really mean and will regulatory change really shift the current landscape?

There has been a huge amount of speculation in the market about what the future of flexibility and particularly the contractor workforce will look like following the changes to the off-payroll working regulations (IR35) in April 2020. Whilst these are bound to have an impact on the way companies engage with contractors, the need for a flexible workforce will remain.

Flexible working has two widely used meanings: flexibility in the way you carry out your job, for example flexible hours or locations and flexibility in terms of additional temporary resource. Both of these types of flexibility are on the rise.

Flexibility of operating whether that is through different hours or working in different locations is becoming an expectation for job seekers. The standard 9-5 hours in the same office everyday is less and less likely to be the experience workers have having. However, there are operational challenges to offering this type of flexibility and technology is core to meeting the increasing expectations from workers that they can choose both when and where they work.

When it comes to additional temporary resources, companies will always have projects and incidents which mean that they can’t manage their workload for a certain period of time using just their permanent headcount. Therefore, there is always going to be a market for contractor resource to bring their experience and skills into the company for the duration of the need. This market has been growing in size with many people choosing their contracting career to give them a wider choice of work, more opportunity to take breaks in their career to follow other interests and a greater experience of both types of work and different companies.

Umbrella companies are likely to become more and more important in meeting contractor needs. And the ability to provide continuous employment across changing contracts means that people choosing this type of work don’t need to miss out on all of the benefits of a permanent role while still maintaining the flexibility of contracting.

I believe the future of flexibility is bright, and whilst the landscape may shift and change over the coming year, there is increasing demand and opportunity on the horizon.

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Your Contractor CV

Your Contractor CV

Your CV is vital as a contractor and it’s essential you make sure it’s right for the role you are applying for. My team reads hundreds of CVs every month and I’ve pulled together the top tips below to help you create a CV which will give you the best chance of landing the role.

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