New salary sacrifice scheme

skint_chick

I have a couple of questions as my employer is changing its pension scheme so AVCs are now made by salary sacrifice from 6th April. I currently pay 5% which is the max matched by the company but was wondering if I paid an additional 5% of my salary in is the only benefit other than a larger pension fund that it costs me 1% less because I'm not paying NI on the salary sacrifice? I earn £14k a year and have other savings so I can afford the extra contributions but it seems like I would only save £7 a year?

Also I don't think this will effect my tax return but just wanted to confirm this as I have rental properties and other income from a business and don't want to make my returns more complicated as I do them myself!

jamesd

Salary sacrifice won't make your tax returns any more complicated. It'll make it a little simpler because you won't need to declare these pension contributions any more.

Salary sacrifice plans vary. Some just save employees the employee NI. Others also pay in some of the employer NI. It looks as though you'd be saving 12% employee NI on the extra contributions plus possibly some of the 13.8% employer NI.

bigadaj

Speak to your employer about the employer ni contributions, my company split these half and half so this would give you another 6 per cent or more.