Pension Salary Savings scheme

borderline

Hi,
I received a letter from my employer saying that they are introducing a salary savings scheme for those employees who make pension contribution into our company's pension scheme. It says it provides National Insurance savings to both the employee and the company and that we will receive the same amount of pension contributions as before but we will increase out take home pay. It works like this;
-We dont make a pension contribution
-The company pays an additional employer contribution equal to our current employee contribution
-Our salary is reduced by the amount of our pension contribution
-We will pay less NIC and so our take home pay will normally increase.

is this a good idea? I don't know if I should trust my company:rotfl: I have the option to opt out
does anyone have something similar? it says that companies like Boots, HSBC and others have a similar scheme.

Southend1

Mine does this too. It's called salary sacrifice. Yes it's a good idea. As you say it boosts take home pay while maintaining pension contribution. Free money!

atush

It is simply cutting what the govt takes in National Insurance from your salary and yes, it is a good idea (for you- maybe not for HM govt).

C_Mababejive

Dont opt out. Its a win for you..

xylophone

http://www.pensionsadvisoryservice.org.uk/workplace-pension-schemes/money-purchase-schemes/salary-sacrifice
http://www.unitetheunion.org/resources/pensions/salary_sacrifice.aspx

may be worth a read.

StephenM_2

We've been doing this for years - at a guess I'd say about 10.

borderline

ok thanks... I guess it's ok to join this scheme then

zagfles

The only downside is that you might get slightly lower state benefits, eg a bit less state pension if you earn in the range about £15-40k. Some other salary related state benefits may be a bit lower.