Salary sacrifice
Discussion
Pensions are starting at work.
The advisor arranging this is pushing the salary sacrifice.
I remember it was mentioned in an old thread here.
Is the sacrifice a problem if you want a new mortgage, maternity leave etc?
Reading up on a few websites gives me the impression that the sacrifice has disadvantages for some people, but the advisor didn't agree.
The advisor arranging this is pushing the salary sacrifice.
I remember it was mentioned in an old thread here.
Is the sacrifice a problem if you want a new mortgage, maternity leave etc?
Reading up on a few websites gives me the impression that the sacrifice has disadvantages for some people, but the advisor didn't agree.
Edited by Nicol@ on Friday 26th February 15:19
The issue you have read up on....and one that most advisers ignore, is that your salary is lower! It's largely as simple as that...any benifits linked to "pay" will be based on the new, lower, salary. Whether thats a bog deal depends on your pay (now and after)
The big saving for sal sacrafice is the employeer who saves a lot of NI.
The big saving for sal sacrafice is the employeer who saves a lot of NI.
And if you are looking for a new job at some point? Your P60 will show a comparatively low Gross Salary. What do you do to prove your current remuneration to a prospective new employer?
Salary Sacrifice works when the government decides that a certain payment or service provided by an employer to the employees will be tax free. In the past we have had tax free arangements for -
profit related pay
computer supplies
pension contrivbutions
child care
These are all politically motivated and relate to the social engineering reqyuirements of the government in power.
Tax free profit related pay and pension contributions were introduced by the Conservatives. Tax free computers and child care were intoduced by Labour.
When these schemes are introduced, it is usually not intended that employers actually CUT employees' pay in ordetr to obtain tax advantages for the employer.
When employers start doing this, it often signals to the government that the scheme is being abused and it leads to the scheme being withdrawn. The Computer and Profit Related Schemes were all ended because of employer "abuse".
Salary Sacrifice works when the government decides that a certain payment or service provided by an employer to the employees will be tax free. In the past we have had tax free arangements for -
profit related pay
computer supplies
pension contrivbutions
child care
These are all politically motivated and relate to the social engineering reqyuirements of the government in power.
Tax free profit related pay and pension contributions were introduced by the Conservatives. Tax free computers and child care were intoduced by Labour.
When these schemes are introduced, it is usually not intended that employers actually CUT employees' pay in ordetr to obtain tax advantages for the employer.
When employers start doing this, it often signals to the government that the scheme is being abused and it leads to the scheme being withdrawn. The Computer and Profit Related Schemes were all ended because of employer "abuse".
Eric Mc said:
Why do YOU have to take a salary cut for THEM to contribute to your pension?
Employers have been able to contribute to employee pension schemes for years. They are keen to reduce YOUR gross salary so THEY don't have to pay Employer's Class I NIC.
Unsure whether that q was for me?Employers have been able to contribute to employee pension schemes for years. They are keen to reduce YOUR gross salary so THEY don't have to pay Employer's Class I NIC.
Pension payments are summats like 50% employee 50% employer to a certain level so with the cut the company will pay 100% of the pension payment.
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