PAYE contractors are entitled to a pension, just like any other type of employment. You may be eligible to join the pension scheme for the business your contract is with. You might also want to consider how you manage your pension savings as you move between different contracts and employers, as you may lose track of small pension pots over your working life.
When you register as a PAYE employee with the business you’re contracted to, you’ll enter a 12-week postponement period. The postponement period is used to assess contracts and determine if you should be enrolled in the workplace pension scheme.
Once you have passed this postponement period, your eligibility will be assessed. In order to be eligible for enrolment in your business’ workplace pension scheme you'll need to be:
You’re also able to set up a personal pension and make additional contributions here (providing that you stay within your annual allowance and other limits).
As a contractor, you could use your personal pension as a central place to transfer your old pension pots that you’ve accumulated through other contracts with different employers. This means you can gain full visibility over your pension, and track your savings.
Our flexible pension made for the self-employed offers a free and no-hassle track & consolidation service, so you can transfer your old pension pots into your Penfold pot. All you need to do is submit your old pension pot details through our app, and our expert transfer team will manage it on your behalf including all of the paperwork. Once the transfer has come through, you can track, project and forecast your future with Penfold’s calculator tools.
To find out more about our transfer service, head here.
It is important to compare providers’ fees & any guaranteed benefits when deciding on whether to transfer, and be sure that the investments available are suitable for you. We cannot accept defined benefit pension transfers. If you decide to close your Penfold account and the value of your pot has gone down, the amount returned to the provider may be less than what you originally transferred.
Please know that if your employer is paying into your pension currently, transferring that pot may mean you lose out on their contribution. For more information on the risks see here.
To understand more about pension investments and the risks, head here.