Pension Salary Exchange

Use pension salary sacrifice/exchange to benefit everyone

Auto – enrolment has led to employer and employee contributions now being at their maximum level. This makes pensions salary sacrifice more attractive. This is an ideal opportunity to introduce a new arrangement that can save significant amounts of National Insurance annually.

These savings can be used to enhance the benefits offered to employees.

Reducing the expense of pension salary exchange/sacrifice

Pension salary exchange/sacrifice is a way of making pension contributions that reduces the National Insurance costs for both employers and employees. However, setting up a new scheme can be challenging and requires careful planning.

Some of the questions you need to answer are:

• How will you communicate the benefits and implications of the scheme to your employees?
•  How will you tailor the scheme to suit your business objectives and employee needs?
• How will you deal with different groups of employees, such as low earners, high earners, or those over state pension age?