Salary sacrifice

s4uch1e

My wife works for a mental health charity and they have asked her if she wants to increase her pension contributions from 5% to 6,7,8 or 9% and they match it. Other part of the form asks if she wants to do a salary sacrifice??
Too be honest we have no idea if she should or not , what real difference would it make.
She currently works 35 hrs a week on £11 hour.
Any advice if she should or shouldn't salary sacrifice would be appreciated 

penners324

Salary sacrifice is a great way to save on National insurance contributions thus getting extra into her pension pot.

To be honest at £11 pH she won't legally be allowed to use it as it will take her below the national minimum wage.

Salary sacrifice means her salary is decreased by 5% (or more if matching) with that going straight to her pension.

As for the matching element that is a great perk. Thinkvof it as additional salary from the company (paid on retirement). She should contribute as much as possible without impinging on your quality of life.

molerat

You can not sacrifice to below minimum wage which is currently £10.42 so could only sacrifice the 5%.  The benefit of sacrifice is that you do not pay tax or NI on the amount sacrificed so a 12% in your pocket gain over non sacrifice.

Albermarle

If her hourly rate was to go up in future faster than the minimum wage, she could salary sacrifice more  and take advantage of the increased employer contributions.

El_Torro

Even without salary sacrifice it probably makes sense to put as much in as her employer will match. Why give up free money?