PensionsPlus

jamesd

The thing to ask for salary sacrifice pension schemes is how much of the employer NI is being contributed to the pension.

If the employer is retaining all of the saved employer NI it can be a less good deal for higher rate tax payers, who only save 1% employee NI, to increase to 1.5% soon. That reduction comes at the expense of lost flexibility because you're normally prohibited from changing your contributions unless one or more events from a limited list of life events happens. The higher rate tax payer can gain or lose from effectively getting the higher rate tax relief each month instead of having to claim it at the end of the tax year. For the higher rate case you're right that if none of the employer NI goes into the pension the employer is getting most of the NI benefit that salary sacrifice delivers.

For those on basic rate tax who aren't near minimum wage it's almost always going to be a good thing, even if the employer isn't paying in any of their NI, because at basic rate the NI payments are similar to the employer NI payments.