Contributions Outside Payroll

Any Member wishing to make pension contributions outside of payroll can do so.  This would be a direct payment to Royal London, usually electronically from the Member’s bank account.

As Scheme Advisers, Patterson-Mills recommends against this contribution method for the following reasons.

• Lost Employee NIC saving – this saving can only be gained by salary reduction within Members’ payroll at Currencycloud.

This saving is 12% for basic rate taxpayers and 2% for higher rate taxpayers.

• Lost Employer NIC saving – again this saving can only be gained by salary reduction in exchange for pension contributions within Members’ payroll at Currencycloud.

This saving is worth 13.80% for all taxpayers, regardless of tax rate.

• Such a contribution is net of basic rate tax. This means any higher rate income tax relief can only be claimed directly from HMRC, which is more complex and causes long delays in re-payment to the Member.