Salary sacrifice- does my employer have to offer it?

Anglichanin

Hello,
I work for an employer who is burying its head in the sand as regards pensions- the company is small enough not to be obliged to offer Workplace Pensions yet and any enquiries about it are met with vague promises to do something when the time comes.
I need to start thinking pensions and have a pension I paid into with a previous employer which is my own. Can I pay into this under a 'salary sacrifice' scheme? Is such a scheme something my employer has to set up? They are waaaay too lazy to do that but if I could sort things out myself, get some paperwork for them to sign, assure them that they would not lose out and that all is above board, then I think it would be something worth doing on my part.
I am PAYE, full-time contract, earning below the 40% threshold but above the zero-allowance, ie paying 20% income tax on most of my earnings.
Thanks in advance,
James

pivotalgubbins

They aren't 'burying their heads in the sand' but are simply too polite it say they are not obliged bad will not provide a pension until they are forced too.

Little chance they'll agree to salary sacrifice either, at least until a mandatory pension scheme in place. There is obvious costs associated with the accounting and administration of any such scheme.

Time to take responsibly for your own pension!

xylophone

https://www.gov.uk/workplace-pensions
In the mean time, you might make a start for yourself - http://www.cavendishonline.co.uk/pensions/personal-pensions/ might be worth a look.
http://www.hmrc.gov.uk/incometax/relief-pension.htm

Savvy_Sue

Hang on, I thought that even before the new legislation finished cascading its way down to smaller companies, all employers had been obliged for some years to have a pension scheme of some kind into which employees could voluntarily pay?

Or did that stop being a requirement?

I know when I was helping to run an out of school club I had to set up a stakeholder scheme, which no-one ever joined because they were mostly students and all earning very small amounts, but nevertheless I was obliged to make the arrangements and set the scheme up!

Of course that's a slightly different question to the salary sacrifice one ...

Debt_Free_Chick

The old requirement to provide access to a stakeholder pension scheme was repealed, when the new workplace pension & auto-enrolment requirements came in, in October 2012. So there's now a period where an employer doesn't need to offer anything on pensions, until their auto-enrolment staging date.

To the OP - even with the new workplace pension scheme, your employer will not have to offer salary sacrifice.

Savvy_Sue

Debt_Free_Chick wrote: »

The old requirement to provide access to a stakeholder pension scheme was repealed, when the new workplace pension & auto-enrolment requirements came in, in October 2012. So there's now a period where an employer doesn't need to offer anything on pensions, until their auto-enrolment staging date.

Thanks, I'd obviously missed that, and I wonder how many companies just never did anything anyway! However, if the OP has been there since before October 2012, it might be worth asking about access to the scheme which legally should have been in place at that time ... Or there again, maybe not ... depends how much of a PITA the OP wants to be!

redpete

Anglichanin wrote: »

Can I pay into this under a 'salary sacrifice' scheme?

Why do you want to do this rather than just pay in from your pre-tax amount? Salary sacrifice has few (maybe no) advantages for the employee.

Dead_keen

redpete wrote: »

Why do you want to do this rather than just pay in from your pre-tax amount? Salary sacrifice has few (maybe no) advantages for the employee.

The employee saves national insurance on the amount that they sacrifice. So that's either 12% or 2% (or somewhere in between) of the amount sacrificed. So a basic rate taxpayer could get £113.64 in their pension for the cost of £100 (even without the employer sharing its NIC savings). As it also gives tax relief at marginal rates, it can also help higher/additional rate taxpayers get tax relief more quickly and easily than if the pension contributions were made net of basic rate tax.