Salary Sacrifice??

Empty pockets, the money goes into your pension before tax is taken off, so it's automatically included in the pension payment already. Instead of £80 going in and £20 added, £100 goes in originally. This automatically handles both basic rate and higher rates of tax without any need for the employee to do anything to claim rebates.

Yes. And you also gain something from saving the NI, not just the income tax.

Employer NI is currently 12.8% of salary at 20% and 40% bands, increasing in April 2011 unless the Conservative party is elected and sticks to their announced plans.

So on £500 of salary sacrifice per month the employer saved NI would be £64, added to your pension pot. About 1.8% of gross salary extra at £42,000 gross earnings.

Employers who are salary cost neutral (paying in all of their saved employer NI) are doing a good job for employees and this opportunity is best jumped at.

wireframe wrote: »

Forgive me if this has been asked already and I've missed it!

Just changed jobs to a company that has a Salary Sacrifice pension scheme, and I'm thinking of putting a large proportion of my salary into it. I'd ideally like to put myself on minimum wage for a single year to really make a difference to my pension.

Lets say I earn £30,000 - its a nice round number. If I wanted to put myself on effectively minimum wage, how would I calculate that? (so I know how much / what percentage to ask HR to take off of my gross salary and put into the pension)
Maths has never been my strong point
Or alternatively, is there an online calculator that could help me?

I found this one: http://www.adviserzone.com/calculators/salarysacrifice.php#assumptions
But I don't understand it.

Generally, you would be advised not to do this as you will fall below the level for some NI contribution based benefits. And your employer may not allow you to sacrifice below a certain level.

Probably best to start off by asking your employer what is the maximum you can sacrifice or what is the level of pay you can sacrifice down to.

Debt_Free_Chick wrote: »

Generally, you would be advised not to do this as you will fall below the level for some NI contribution based benefits. And your employer may not allow you to sacrifice below a certain level.

Probably best to start off by asking your employer what is the maximum you can sacrifice or what is the level of pay you can sacrifice down to.

They say I can sacrifice upto the legal maximum, 100%. I don't think I could afford to live on 0 income for a year tho
I'm not fussed about potentially impacting those benefits for the period of 1 year.
(as an aside, Debt_Free_Chick, I've been really impressed by some of your responses on this thread; well thought out and constructive, they've helped me a lot!)

jamesd wrote: »

wireframe the minimum wage is currently £5.80 per hour so multiply that by hours worked per week and weeks per year. Remember to claim tax credits because of your low wage.

What, just like that? Is there nothing more to it? What sort of tax credits?

They thing I was most worried about was the potential that they may tax me the amount they're taxing me right now, but with much less money going into my pocket. For example, if I pay £200 NI AND £200 PAYE now, will I still pay those values if my monthly take home (after SS) is only £600?