Personal Pensions

If the company does not offer a Stakeholder/Pension scheme, the employee can pay into a personal pension themselves. The employer can deduct the pension amount from the employee and pay it to the pension company on their behalf.

With a personal pension the employee would pay regular monthly amounts or a lump sum to the pension provider who will invest it on their behalf. The fund is usually run by financial organisations such as building societies, banks, insurance companies or unit trusts.

Personal pensions may be suitable for:

• people who are self-employed
• people who are not working but can afford to pay for a pension
• employees whose employer does not offer a company pension scheme
• employees who have the option to pay into a company pension, but choose not to
• employees on a moderate income who wish to top up the money they would get from a company pension
  
  

A personal pension may not be the best choice if:

• The employer offers a company pension scheme
• The employer offers access to a stakeholder pension scheme, with an employer contribution

Setting up a Personal Pension on BrightPay

To access this utility, click Pensions:

1) Click Add New Scheme followed by Personal Pension (PP)

2) Enter the name of the policy and the reference number provided by the pension company

3) Default Contributions - this is optional. Complete this section if you would like to apply default contributions to an employee who is added to this pension scheme. They can subsequently be changed for each employee as required

4) Tax Relief - if applicable, tick this box to reduce contributions by the basic rate of tax

5) If applicable, set a range of earnings on which to calculate percentage-based deductions for the scheme

6) Within the Contact and Payment section, enter the contact details of the pension provider

7) Select the method of payment for remitting the pension contributions to the pension provider. If the method of payment is credit transfer, enter the pension provider's bank account details accordingly. 

8) Click Save

Applying the Pension Scheme to an Employee

To apply the pension to an employee click Payroll and select the employee:

TO ENTER A PENSION DEDUCTION BY AMOUNT:

1) Under Additions & Deductions click the Add icon

2) Under Deduction, select the PP pension scheme

3) Select the £ sign from the drop down menu and enter the Employee Contribution

4) Select the £ sign from the drop down menu and enter the Employer Contribution, if applicable

TO ENTER A PERCENTAGE-BASED PENSION:


1) Under Additions & Deductions click the Add icon

2) Under Deduction, select the PP pension scheme

3) Select the % sign from the drop down menu and enter the Employee Contribution percentage amount

4) Select the % sign from the drop down menu and enter the Employer Contribution percentage amount, if applicable