Contractors can opt out of the new pension reforms but umbrella companies must offer the scheme, according to website Contractor Calculator.

Those who work through one-person or husband-and-wife contractor limited companies will not be forced to partake in the new state-run pension schemes announced by the Department for Work and Pensions.

However, umbrella companies will have to run the scheme although employees are able to opt out if they so wish.

Tony Harris, of specialist independent financial adviser ContractorFinancials, told Contractor Calculator that umbrella companies now have until August 2014 to come up with a scheme.

"Limited company contractors who pay themselves a salary below the National Employment Savings Trust (NEST) threshold, or have alternative approved pension plans in place, won't be required to put in place this new pension," he said.

Umbrella company contractors who do choose to opt in to the new scheme will have to pay seven per cent of the salary to a pension scheme.

This is due to the fact that in an umbrella scheme, the contractor will have to put up the three per cent employers contribution as well as their own.