If you work for some of the biggest companies in Manchester, you’ll probably receive extra benefits above and beyond your salary. For example, if you work at Kellogg’s factory in Manchester, perks of the job can include medical cover, subsidised meals during work hours, short Fridays, and, sometimes, the odd box of cereal. It’s a similar story at other major companies based in and around the city, such as Unilever, Arup, and United Utilities. One of the other major benefits of working for a large corporation is the pension schemes they offer to employees. 

Employee Perks Can be Automatic

Since 2012, companies that are part of the government’s workplace pension scheme can “auto-enrol” employees. This means that anyone aged between 22 and the state pension age earning over £10,000 a year will have a certain amount of their salary invested into a pension. The benefit of auto-enrolling on a workplace pension scheme is that your employer will make a contribution. Moreover, you’ll receive 5% tax relief based on the money you put in.  

This system takes the hassle out of planning for your retirement. Moreover, it’s an additional perk that companies such as Kellogg’s can offer employees. But what if you want to opt-out? That’s possible. It might not be advisable, but you can do it. Some people do this because they want to manage their own retirement fund. That’s fine, but it doesn’t have to be that way. Thanks to something known as a self-invested personal pension (SIPP), you can enjoy the perks of a workplace scheme and manage your own retirement pot at the same time. 

Take Control Of Your Retirement Fund

Workplace pensions are typically controlled by a company that makes financial investments on your behalf. A SIPP allows you to take control and invest money in the stocks, funds, and other assets you want to buy. However, your ultimate goal with a SIPP is to invest money in a tax-efficient way ready for retirement. It’s tax-efficient because you receive relief in two main ways. 

Firstly, your investments are allowed to grow free of income and capital gains taxes. Secondly, the government will top up your contributions by 20% (if you’re a standard rate taxpayer). However, when you’re looking at the potential tax relief benefits, it’s important to understand SIPP contribution limits and allowances. Basically, there is an annual contribution cap that covers all of your pensions. In 2021/2022, the cap was £40,000. Therefore, you need to look at how much you’re paying into every pension scheme, regardless of whether it’s through your employer or personally. 

Don’t Be a Brit Without a Pension

Anything over £40,000 won’t qualify for tax relief, unless you’ve carried forward any unused balances from the last three years. Assuming you don’t cross that threshold, a SIPP can help you take more control over your financial future and, in turn, top up your retirement fund. This type of financial product isn’t for everyone. Indeed, one of the main reasons people apply for certain roles is for an attractive pension. 

That’s certainly the case with many of Manchester’s largest companies. However, in today’s digital world, it’s easier than before to manage your own retirement fund. Research carried out by the Financial Conduct Authority in 2017 found that 13% of Brits didn’t have a private pension. A SIPP might not be right for you. But, if you don’t work for a company that offers a pension scheme, such as Kellogg’s et al, setting up something of your own is probably a good idea as a means of supplementing your living expenses.  

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