Annual bonus - how to put it into a pension scheme..

[rlw]

Not my area of expertise so...

One of my clients is paying one of her staff a £10K bonus shortly. To my mind it seems criminal to give £4K to the government without looking at ways of doing better with the money. The employee does not have a pension scheme, nor does the employer yet (and is not keen until pushed to do so) so is there a way to make half of this money, efficiently, a first payment into a new scheme.

A bit vague but all contributions (ho ho) welcome.

Thanks

[Keep it stiff]

Yes. Quick & easy to start a SIPP, plenty of providers to choose from. The employer can then pay the gross sum directly to the SIPP provider who will credit the account.

[ChasW]

Better still see if they will pay the bonus via salary sacrifice scheme. It's entirely legit though involves paperwork for the payroll/finance team. This way the employer does not have to pay National Insurance on your bonus payment. The trick is to persuade them to pay the entire 12.8% saving back to your friend. Then the total paid into the SIPP is £11280 which for many is far better than £6000 cash in the bank unless you really need it.