Potential capping of Salary Sacrifice (speculation)?

eastcorkram

westv said:

Andy_L said:

westv said:

Andy_L said:

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

Where does it say that?

It doesn't need to. It's implicit that a cap on sal sac wont impact anyone who doesn't have access to it

You claimed the vast majority of private sector workers don't have sal sac. 

I'd imagine that's true. I had it in my final job. I was there for 14 years. Anyone joining about two years after me, doesn't have the opportunity to use sal sac. 

hugheskevi

westv said:

Andy_L said:

westv said:

Andy_L said:

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

Where does it say that?

It doesn't need to. It's implicit that a cap on sal sac wont impact anyone who doesn't have access to it

You claimed the vast majority of private sector workers don't have sal sac. 

The DWP Employer Survey 2024 (slide 33) found that 42% of employers offered employee salary sacrifice. Almost all large private sector employers offer salary sacrifice, so it is likely that the minority of employers offer salary sacrifice, but that the majority of private sector employees have access to salary sacrifice.

Reports over the last few years have suggested some employers were moving away from salary sacrifice and instead just implementing non-contributory schemes, eg, 8% employer contribution and nil employee for automatic enrolment requirements, to simplify payroll. The rumoured changes might accelerate that.

hugheskevi

Grumpy_chap said:

SVaz said:

Stupid people are saying that it will stop them paying into pensions.  🙄
If my Maths is correct,   someone sal sac-ing £10k would pay £640 in NI if it came to pass.
They would still save £3360 in tax. 

I don't see where the £640 calculation is from.

(£10,000 - £2000) * 8% = £640

Grumpy_chap

eastcorkram said:

I'd imagine that's true. I had it in my final job. I was there for 14 years. Anyone joining about two years after me, doesn't have the opportunity to use sal sac. 

I suspect that is highly unusual as it is my understanding (I don't have data) that the prevalence of SS has been increasing rather than decreasing.

Cobbler_tone

I currently sacrifice 56% of my salary, so you could say I'm their perfect customer.  

I've already worked out how much I'd need to reduce my contribution, as it ends up becoming about net affordability. It would be a chunky reduction of my net pay. It'll certainly help to achieve what they are aiming for and on the plus side I have found out I have broad shoulders. Having said that, it could be a key motivator for an earlier retirement next April. 

westv

eastcorkram said:

westv said:

Andy_L said:

westv said:

Andy_L said:

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

Where does it say that?

It doesn't need to. It's implicit that a cap on sal sac wont impact anyone who doesn't have access to it

You claimed the vast majority of private sector workers don't have sal sac. 

I'd imagine that's true. I had it in my final job. I was there for 14 years. Anyone joining about two years after me, doesn't have the opportunity to use sal sac. 

Why would a company stop using sal sac and pay more NI?

eastcorkram

westv said:

eastcorkram said:

westv said:

Andy_L said:

westv said:

Andy_L said:

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

Where does it say that?

It doesn't need to. It's implicit that a cap on sal sac wont impact anyone who doesn't have access to it

You claimed the vast majority of private sector workers don't have sal sac. 

I'd imagine that's true. I had it in my final job. I was there for 14 years. Anyone joining about two years after me, doesn't have the opportunity to use sal sac. 

Why would a company stop using sal sac and pay more NI?

I've no idea. Made no sense to me, but then neither did most of their decisions! People who were already in the scheme, were unaffected. A lot of people weren't even in the scheme. In my department of 10 people, only two were in the pension scheme. Anyone joining from around 2013 onwards, could not use sal sac. Total workforce around 600.

FIREDreamer

westv said:

eastcorkram said:

westv said:

Andy_L said:

westv said:

Andy_L said:

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

Where does it say that?

It doesn't need to. It's implicit that a cap on sal sac wont impact anyone who doesn't have access to it

You claimed the vast majority of private sector workers don't have sal sac. 

I'd imagine that's true. I had it in my final job. I was there for 14 years. Anyone joining about two years after me, doesn't have the opportunity to use sal sac. 

Why would a company stop using sal sac and pay more NI?

Salary sacrifice only impacts employee NI I believe, so no gain to the employer from salary sacrifice as they are paying their own, real, employer contributions regardless.

A different ball game if employer and employee contributions have to pay NI though.

NoMore

FIREDreamer said:

westv said:

eastcorkram said:

westv said:

Andy_L said:

westv said:

Andy_L said:

BlackKnightMonty said:

At a time when people are making inadequate pension provisions, and when the government is seeking greater investment into the UK (and what do pension funds invest in); it is extraordinary the government are proposing to do this. This will reduce the amount being saved into private pensions. The lack of joined up thinking is incredible. This is a target on private pensions only; it has no impact on civil servants!

or the vast majority of private sector workers who don't have access to SalSac schemes

Where does it say that?

It doesn't need to. It's implicit that a cap on sal sac wont impact anyone who doesn't have access to it

You claimed the vast majority of private sector workers don't have sal sac. 

I'd imagine that's true. I had it in my final job. I was there for 14 years. Anyone joining about two years after me, doesn't have the opportunity to use sal sac. 

Why would a company stop using sal sac and pay more NI?

Salary sacrifice only impacts employee NI I believe, so no gain to the employer from salary sacrifice as they are paying their own, real, employer contributions regardless.

A different ball game if employer and employee contributions have to pay NI though.

the employer saves employer NI as well when sal sac used

Grumpy_chap

FIREDreamer said:

Salary sacrifice only impacts employee NI I believe, so no gain to the employer from salary sacrifice as they are paying their own, real, employer contributions regardless.

A different ball game if employer and employee contributions have to pay NI though.

Your belief is incorrect in the case of SS pension contributions.

The employee reduces their salary by, say £10k.
The employer increases the employer pension contributions by £10k.
The employee saves income tax and employee's NI on the £10k.
The employer saves employer's NI on the £10k.