PHI / Life cover options with Pension Salary Sacrifice

michaels

I was planning to salary sacrifice down to minimum wage for 13/14 to make a large one off boost to my pension fund with child benefit/tax credits/tax releif/No NI meaning my net would only fall by 20k for a 55k pension contribution.

However one employment benefit I receive is PHI/life insurance and apparently if I salary sacrifice more than 60% of my gross these will be based on my actual pay rather than my notional pre-sacrifice income. Thus the full sacrifice leaves me potentially under-insured but sacrificing to 40% salary I lose most of the tax credit benefit of the proposal.

Doing the pension boost as a single hit over 1 year rather than over 4 years with a smaller sacrifice increases my net over the period by about 8k so I would rather do it this way. Thus my question is could I take out seperate provision for PHI and life using some of the 8k to get back to my current level of cover and still be quids in?

Thanks

michaels

Thanks for everyone who looked. Sadly it seems no one on the board knows about PHI with very short term (1 month) and low nominal income due to salary sacrifice?

ACG

I have only just seen this.

If you were to claim on PHI they would look at what your wage is/wag prior to a claim being made.

Have you spoken to the insurance company? Your sacrificing your salary for one year, your wage isnt actually decreasing as such, so they may be prepared to accept that.

If their not prepared to accept that then its down to you really to make the decision on whether the benefits outweigh the risks or not.