Salary Sacrifice clarification

johnwark

I am being offered a salary sacrifice in my work as part of a deal moving my pension contributions from 4.5% to 10% to keep my final salary pension at a 1/60th rate. The sacrifice will offset the rise in cost by around £20 a month.

My salary will be kept the same as regards future wage rises/ overtime and mortgage applications etc.

It seems a no-brainer to me to take the "free" £20 as no other benefits are affected but some are concerned that this will have a negative affect on how much the company pay into the pension fund, currently 12% to my 10%.

Can anybody give me the pros and cons of taking the sacrifice?

Our salarys are around the 30k mark.

EdInvestor

http://forums.moneysavingexpert.com/showthread.html?t=174519

jamesd

The handling of the employer national insurance in salary sacrifice can give the meployer anything from all of it to none of it as reduced employer costs, without affecting the amount that ends up in the pension contributions. You can ask how the employer and employee NI saved is being apportioned.