Torygraph suggesting salary sacrifice to go

michaels

Suggestion seems to be any contributions over the legal minimum (5%+3%) will be subject to at a minimum employee and employer NI and possibly also income tax.

No doubt the 30% odd notional employer contributions to public sector pensions will not be seen in the same light.

We voted for this government.

JoeCrystal

No point speculating about such things until it is actually announced!

ussdave

Might happen (and I'll be annoyed if it does) but the key word in this is in your thread title - Torygraph.  Pretty standard speculation, scaremongering and trying to undermine the party that the paper doesn't support.

2nd_time_buyer

michaels said:

...
We voted for this government.

The research the article was based on was commissioned under the previous government.

ali_bear

Hilarious. I don't look at that paper but I regularly see their article headlines in my news aggregator feed. Rachel Reeves wants to burn your house down etc. Daily. Quite funny really. 

dunstonh

If I were in Government and looking at the existing deficit, salary sacrifice in respect of pensions would also be on my radar. 

1 - It only benefits some employees and does not benefit the self-employed.   
2 - it has grown from a tiny insignificant cost to the Treasury to over £20bn a year.
3 - Most people don't even know they are benefiting from it.

2nd_time_buyer

dunstonh said:

If I were in Government and looking at the existing deficit, salary sacrifice in respect of pensions would also be on my radar. 

1 - It only benefits some employees and does not benefit the self-employed.   
2 - it has grown from a tiny insignificant cost to the Treasury to over £20bn a year.
3 - Most people don't even know they are benefiting from it.

Agreed but it also helps to balance the disparity between basic rate and higher rate tax relief, encouraging more basic rate tax payers to pay in to pensions.

westv

Let's not forget that sal sac doesn't just apply to pension contributions so any plan to restrict it doesn't automatically mean it would affect those.

artyboy

westv said:

Let's not forget that sal sac doesn't just apply to pension contributions so any plan to restrict it doesn't automatically mean it would affect those.

What, you mean no more cheap Teslas on employer finance schemes??

**Clutches Pearls**

af1963

7dunstonh said:

If I were in Government and looking at the existing deficit, salary sacrifice in respect of pensions would also be on my radar. 

1 - It only benefits some employees and does not benefit the self-employed.   
2 - it has grown from a tiny insignificant cost to the Treasury to over £20bn a year.
3 - Most people don't even know they are benefiting from it.

 ... and it isn't an option for anyone on (or just above) minimum wage, because they are not allowed to salary sacrifice below minimum wage, even if it would make them better off than paying their pension contributions using relief at source.

The big problem with changing salary sacrifice would be distinguishing between "employer contributions coming from salary sacrifice" and "employer contributions because that's what was specified in your contract", and maybe also  the more open-ended "employer contributions that are whatever it takes to fund the defined benefits pension that is specified in your contract and might be made immediately, or at any time including after you have retired". 

Although maybe they could use the notional "pension input amount" as a proxy for the DB contributions. And some of the consultation options seem to be lumping the first two situations together by just proposing limits on the total paid.

Making extra pension contribs subject to income tax would surely just mean nobody would make them ?  Why would you choose to pay tax immediately, and then again on withdrawal ? Just take it as salary and invest it outside the pension. The NI argument is a bit different.

af1963

artyboy said:

westv said:

Let's not forget that sal sac doesn't just apply to pension contributions so any plan to restrict it doesn't automatically mean it would affect those.

What, you mean no more cheap Teslas on employer finance schemes??

**Clutches Pearls**

Childcare and bikes too.  Stuff the government ( and its predecessors) want to encourage.

But like the pension, not possible for people on or near NMW.