Salary sacrifice pay more ?

flopsy1973

my current scheme with work that I contribute to is SC which is paid to the max of company contributions. So if I add further 200 it will have to be under SC scheme as it will be coming out of salary so will I gain any more out of it this way? 33% gain ? or am i better putting in personal lump payment and getting tax relief ?

MX5huggy

Is SC salary sacrifice? 

Salary Sacrifice is the best way to contribute to a pension. 

Each £100 costs you just £68 in reduced take home pay, from April this will fall to £66.75. If you pay student loan repayments this is reduced by another £9. 

If you took the pay so got £68 in your bank then contributed to a pension tax relief would be added at 25% so you would get £85 in your pension. So £15 better off using Salary Sacrifice per £100 if you do £200 per month that’s £360 per year. 

Dazed_and_C0nfused

Salary sacrifice is usually the most tax efficient method of contributing, you just need to make sure you understand the different methods.

To add £200 via salary sacrifice means you agree to give up £200 of your salary.  In return your employer makes a contribution of £200 to your pension fund.

As this is an employer contribution there is no pension tax relief due so your fund has an extra £200 in it.

But by giving up that £200 you have probably avoided paying 20% income tax and 12% NI on it.  Or 40% tax and 2% NI.