Salary sacrifice

SCO

I am looking to boost my pension, currently just pay the minimum into my pension. 

Is salary sacrifice worth doing?

Or just upping my payment.

Won't need a loan in near future as I know it reduces your yearly wage. 

Thanks 

r6mile

With salary sacrifice the answer is typically yes; are you a higher-rate or basic-rate taxpayer?

SCO

Basic rate taxpayer 

SCO

How much do you sacrifice normally 
? 

r6mile

If you are a basic-rate taxpayer, then you will also save on 12% National Insurance via salary sacrifice. So £1 into your pension costs you 68p, which is pretty good. Obviously your money is locked into your pension until you are 57 (as it stands). The basic rule of thumb is to contribute half of your age, including employer contributions. So someone who is 40 should be putting in 20%. Obviously that may not be affordable, and it's always sensible to be saving into money you can access earlier as well. So no hard rule I guess!

SCO

Does SS make a big difference than me just upping payments? 

MallyGirl

SCO said:

Does SS make a big difference than me just upping payments? 

pension contribution has 20% tax relief. Sal sac has tax relief plus 12% NI relief so 32%.
I'd call that a big difference

Qyburn

How are you currently making your contributions? Does your employer offer salary sacrifice? If he does it's a bit odd that you're not already using that for your existing contributions.

SCO

Qyburn said:

How are you currently making your contributions? Does your employer offer salary sacrifice? If he does it's a bit odd that you're not already using that for your existing contributions.

Automatic enrolment from salary but not SS. They do offer SS. Need to request SS.

SCO

Is their a calculation I could do to figure out how much I need to SS.  

SCO

Thanks to everyone