Salary Sacrifice Pension Scheme: Who Qualifies and What You Get
Learn how a salary sacrifice pension scheme can reduce your tax burden while building your long-term savings.
A salary sacrifice pension scheme is a way to put money into your pension by agreeing to give up a portion of your gross salary instead.
Who it's for
This scheme is available to employees whose employers choose to offer it as part of their benefits package.
What you get
By sacrificing part of your pay, you can achieve savings on both your Income Tax and your National Insurance contributions. This allows more money to go toward your pension than if you paid into it from your take-home pay.
What it costs you
The main trade-off is that your official gross salary will appear lower on paper.
The catch to know
Because your reported salary is lower, this could potentially impact your mortgage borrowing capacity when you apply for a loan.
How to apply
- Check with your employer to see if they offer this scheme.
- Discuss the specific amount of salary you wish to sacrifice.
- Confirm how these changes affect your take-home pay and future benefits.