Those with employers who agree to salary sacrifice

agent69

I retired recently and can't speak too highly of salary sacrifice (guess I was lucky that my employer paid all 13.8% NI saving into my pension, along with the normal 8% contribution to the senior managers scheme).


For my last year of employment I worked 3 days a week, receiving minimum wage (rest paid into pension). It is a realy surreal situation where the amount you get paid (money paid into pension + money paid into bank account) is higher than my gross salary.

MEM62

My employer passes on 100% of the savings - because I organised the scheme!

Paul_Herring

For our old scheme, of which I'm one of the few remaining members, 100% of the 13.8% ER NI.

For the current scheme, 0%.

michaels

agent69 wrote: »

I retired recently and can't speak too highly of salary sacrifice (guess I was lucky that my employer paid all 13.8% NI saving into my pension, along with the normal 8% contribution to the senior managers scheme).


For my last year of employment I worked 3 days a week, receiving minimum wage (rest paid into pension). It is a realy surreal situation where the amount you get paid (money paid into pension + money paid into bank account) is higher than my gross salary.

I have been doing it for the last 3 years, just feels like a saving scheme with an excellent rate of return, savings are being depleted now but will be replenished via the tfls.

Novice_investor101

How can you tell if your employer is paying in their NI saving? Would your contribution show as higher than what you actually sacrificed?
My scheme does equate to a pay in 4x what I'd be giving up in take home pay, so I think it's great, I'd just assumed that my employers 14% included their NI saving.

cloud_dog

It is not that the amount going in to the pension is more. It simply costs you less to make the payment. By extension, this means you could afford to pay more in if you wished.

For a BRT payer a SS pension contribution equates to:

£100 goes in to the pension

£68 cost of the above to the employee, reduction in take home pay.

£54.20 cost of the £100 if the employer gives you all of their NI savings.

So if you were happy to reduce your take home pay by £68 you would contribute £100 (with your SS). If you included your employers NI you would actually contribute £125 in to your pension and your take home pay would still only reduce by £68.


EDIT: I've rounded some of my numbers.

Paul_Herring

Novice_investor101 wrote: »

How can you tell if your employer is paying in their NI saving? Would your contribution show as higher than what you actually sacrificed?

On my payslip, I see a deduction of £1,000 and a corresponding line item for pension totalling £1,138. (Well, for the pension where work does pay the ER NI...)