Salary sacrifice to be taxed

[SomethingInTheAirToday]

https://x.com/politlcsuk/status/1986914552093745592?s=46

not only are my generation not going to have a state pension or private healthcare, but we also can’t save into our own pensions because we need to fund the current generation.

this makes me so angry

Have you heard of kite flying? It’s a common political tool.

They use it because it saves their NHI costs not because it benefits their staff.

https://moneyweek.com/personal-finance/pensions/scrapping-pension-salary-sacrifice-cost

Where did I say that they used it to benefit their staff?! Does your employer not offer salary sacrifice? I’m wondering why you have such a problem with it because it’s a win win as far as I am concerned.

Are you talking about the state pension or pension credit? Or both?

Even if you don’t strictly use salary sacrifice, if you pay into a pension from your taxed income you can claim the income tax back from HMRC. Same difference.

Private pension obviously

Yes but to be fair they aren’t suggesting putting income tax on pension contributions as far as I can tell? Just NI?

Even if it is only 30%, that’s millions of people that would be impacted.

I agree. And I think it’s a terrible idea because pension contributions should be encouraged. I was just saying that the poster was right about it being a minority of workers.

The whole ‘worse state pension in Europe’ thing is nonsense too. We have a state pension and occupational pensions. The government gives you the state pension and allows you to save into your occupational pension tax free.

in the vast majority of European countries there is no occupational equivalent. You, your employer and the state invest everything into your state pension, hence it’s much higher than what we have in the UK. If you compare occupational pensions + state pensions in the UK with state pensions in other European countries we are bang in the middle. No grievance to be had here if you compare apples with apples and instead of apples and pears.

Stop gaslighting.

My employer gives me the NI saving, so as well as saving 20% tax I get the NI they save too. This is not uncommon in the sector I work in and has really helped boost my pension, I will miss it if it goes.

Maybe I am. Can’t affording housing, food, a car and a social life. Can’t get decent healthcare. I can’t afford to see a dentist. I can’t imagine ever retiring or buying a house. Yet I still have to work, to fund the pensioners while I won’t have one.

They need to bring back the 10% tax on low earners and benefit recipients. We’re the only country in Europe that doesn’t have it.

yeas

and what are you going to do about it? moan or collectively stand up and tell your employer, you're not doing it for the pittance they pay you? Or are you worried about the shareholders not getting their dividens if the workers get a proper pay rise?

stop moaning and do something about the shit pay you're getting that you can barley live on

I think the govt should stop "pitch rolling" or to put it another way, torturing us, and just tell us all about the budget on budget day. Or putting it another way, Stop trying to butter us up for the inevitable tax rises.

It's not unreasonable to be concerned about how defined-benefit pensions are going to be funded in future. It is clear how a defined-contribution pension is funded: a fixed amount of money goes into a pot, you withdraw it until it's gone, the end. That is not the case for DB pensions funded out of tomorrow's taxes.

(I include the state pension as well as public sector DB pensions in that.)

Nothing stops Europeans from having private pensions too.

Nothing stops us having private pensions too.

Some Entire industries have terrible pay
It would make no difference if you looked elsewhere if everyone is offering the same
Nor would it make any difference if everyone stood up to demand more

If the moneys not there it’s not there
Not everyone works for some huge industry or has access to a union.
It really is put up or shut up for most

The country needs to reduce benefits, encourage / make everyone work a full week and stop cherry picking taxes on aspiration and forward planning

Yes but if people are taxed on the pension money as they pay into it, more people will keep the money instead and either spend it or save into a bond. Why would people pay into a pension where their money is locked in until they are 70+ for no financial benefit.

Agree. I do think the lower threshold ( £12570 ) should be looked at for both ni and tax

Along with compulsory ni contributions for the self employed

A way to enforce no cash payments to the self employed might also bring more into the coffers.

Interest on bonds is taxed every year
Pension interest isn’t

Has anyone considered this might be a good thing?
It might stop the Men who do this to get out of paying CM by artificially lowering their earnings, often down to minimum wage.
It’s a tax dodge encouraged by employers because it saves them NI.
Most of the people commenting online seem to have NO idea what salary sacrifice actually is.