The iniquity of Salsac on lower paid workers

artyboy

First, big disclaimer. I have been a big, huge, gigantic beneficiary of salsac in the past. So yes, I like it. A lot.

But something that just hit home was when my oldest asked me to take a look at the pension arrangements for her nice shiny new graduate job. It's a net pay arrangement, so I was about to say to her that she might (gently and at the right time) see if her employer had looked at salsac as an alternative, for the NI savings that it could generate for all concerned.

And then I realised that her salary (and I suspect quite a few of her colleagues, also grads) is only just hovering above the NMW equivalent. So salsac simply isn't possible. 

And so lower paid employees don't get the pension tax breaks that us plutocratic old fat cats are able to score.

Still, I guess I need someone to pay NI so that I get my state pension...

Cobbler_tone

My employer has just given large sections of the work force enhanced pay rises. In order to allow all employees the option to join the pension, private health care and the share scheme (all via SS whilst staying above NMW) we have increased our minimum wage to £30k PA. We had some lower paid people on c£26k, so that is a hefty bump. 

Grumpy_chap

This might very well be better suited to the Discussion Time boards.

Anyway, your Daughter with her Graduate job wage cannot afford to SS large amounts into her pension.
Also, on her Graduate job wage, can she afford a Rolls Royce, First Class holidays, gold watches, designer clothes, etc?
They are all just functions of the wage level.
The positive thing is, your Daughter with her Graduate level job has every prospect of her salary level increasing and taking her to the point where she can maximise SS opportunities in the future.

Marcon

artyboy said:

First, big disclaimer. I have been a big, huge, gigantic beneficiary of salsac in the past. So yes, I like it. A lot.

But something that just hit home was when my oldest asked me to take a look at the pension arrangements for her nice shiny new graduate job. It's a net pay arrangement, so I was about to say to her that she might (gently and at the right time) see if her employer had looked at salsac as an alternative, for the NI savings that it could generate for all concerned.

And then I realised that her salary (and I suspect quite a few of her colleagues, also grads) is only just hovering above the NMW equivalent. So salsac simply isn't possible. 

And so lower paid employees don't get the pension tax breaks that us plutocratic old fat cats are able to score.

Still, I guess I need someone to pay NI so that I get my state pension...

Hardly news, I'm afraid. Low paid employees (especially part timers) in net pay arrangements often don't even get the benefit of tax relief. 

Dazed_and_C0nfused

Marcon said:

artyboy said:

First, big disclaimer. I have been a big, huge, gigantic beneficiary of salsac in the past. So yes, I like it. A lot.

But something that just hit home was when my oldest asked me to take a look at the pension arrangements for her nice shiny new graduate job. It's a net pay arrangement, so I was about to say to her that she might (gently and at the right time) see if her employer had looked at salsac as an alternative, for the NI savings that it could generate for all concerned.

And then I realised that her salary (and I suspect quite a few of her colleagues, also grads) is only just hovering above the NMW equivalent. So salsac simply isn't possible. 

And so lower paid employees don't get the pension tax breaks that us plutocratic old fat cats are able to score.

Still, I guess I need someone to pay NI so that I get my state pension...

Hardly news, I'm afraid. Low paid employees (especially part timers) in net pay arrangements often don't even get the benefit of tax relief. 

But from 6 April 2024 a lot of them will do (retrospectively).

https://www.litrg.org.uk/pensions/paying-pensions/tax-relief-pension-contributions/pension-tax-relief-problems-low-earners#2