Salary sacrifice

[eatyourcrustspls]

Morning all

Just looking at getting a new electric car. I can get one through my work on salary sacrifice. I only work 15hrs a week and bring home around £15k a year.

Would the salary sacrifice option severely impact my pension? I work for the NHS and currently pay 9.3% into my pension.

My DH is the higher earner but he doesn't have the salary sacrifice or fleet scheme through his work.

Many thank

Well, it depends on your definition of 'severely' - the 2015 NHS pension scheme works off 1/54 of your pensionable earnings per year of membership, and salary sacrifice schemes reduce your pensionable earnings so the money you're accruing as pension will be reduced in accordance with the amount you're paying into the salary sacrifice scheme which I am guessing will be a fairly significant part of your salary. You can do your own rough calculation of by how much if you know much the car will cost per month.

Whether the number you come up with represents a big issue for you depends on how close you are to retiring, how many other years you have already contributed to your pension, how much of an income you need in retirement and your other/your DH's other pension provision ... it may will still stack up as worth it for you compared to the other options i.e. buying outright brand new, buying outright second hand, leasing not through salary sacrifice really depend on a lot of variables... if you are concerned about your pension provision you could always choose to make additional voluntary contributions if you/your DH have some spare income?

I thought you had to be full time with NHS or earn over a certain amount to do the scheme?

@maxelly

Well, it depends on your definition of 'severely' - the 2015 NHS pension scheme works off 1/54 of your pensionable earnings per year of membership, and salary sacrifice schemes reduce your pensionable earnings so the money you're accruing as pension will be reduced in accordance with the amount you're paying into the salary sacrifice scheme which I am guessing will be a fairly significant part of your salary. You can do your own rough calculation of by how much if you know much the car will cost per month.

Whether the number you come up with represents a big issue for you depends on how close you are to retiring, how many other years you have already contributed to your pension, how much of an income you need in retirement and your other/your DH's other pension provision ... it may will still stack up as worth it for you compared to the other options i.e. buying outright brand new, buying outright second hand, leasing not through salary sacrifice really depend on a lot of variables... if you are concerned about your pension provision you could always choose to make additional voluntary contributions if you/your DH have some spare income?

Thank you. I've been in the scheme for about 9 years - am 35 so will be working for a few years yet and hope to increase my hours once DC in school. I don't actually know what scheme it is to be honest - suppose in need to find that out. I have worked for the NHS since I was 18 and when I first qualified I dipped in and out of it, took some money out when we had a disaster etc

There's no way we could afford one brand new / finance etc

DH's pension is a basic flat rate but his contributions are going to increase

To PP - no it doesn't seem so.

I work the same hours and get similar pay. Yes you can get a car- and a top range one at that- and yes it does affect your pension. It doesn’t matter so much to me because I work other days in another job with another good pension. I pay/ lose the cash of around £400 pm. They take £800 from my actual salary before tax, pension etc. so I lose about £240 pension. Not ideal, but as I say I have another great one as does my husband. Hope that helps