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

so they can have a better retirement?

Which reduces the risk of people being a burden in the state in the future.

Well everyone’s pension is set up that way at the companies I have worked for so everyone benefits from salary sacrifice (unless they don’t join the pension scheme).

ohhh ahaha maybe I should actually read it properly. My bad.

speculaction

Some employers put the NI contribution into the pension. It’s a way of encouraging people to be responsible and save for retirement.

What do you mean, on double that? If a 48K pa person has 2 children in a state school, which is up to £18K pa per place in a state school, no way will they be a nett contributor - to cover the little darlings' places alone - it is £36K.

sounds like it is to me…

Only the first £2,000 of pension contributions via salary sacrifice would avoid NI
Anything above £2,000 would still go into your pension, but you’d have to pay NI on it

I'm a pensioner. I downsized from a house that still had a mortgage on it. Sold it for a lot less than market value because I couldn't afford the associated costs to sell it on the open market. We paid the mortgage off, bought a park home with what was left and still have to pay ground rent and council tax etc. What the fuck do you suggest we do? Stop trying to make it a race to the bottom.
Our retirement park has about 55 homes and not one of us is living a life of luxury.
Fucking horrendous attitude.

No confusion here.
This will still be a significant hit to higher earners, esp those trying to avoid 100k trap.

BUT - remember everyone was happy when RR increased employers' NIC? no tax increases for working people they said. Look at job market now.

With this NI tax employers will be reviewing headcount even tighter and will def reduce their pension matching schemes.
Slow clap Labor, no one can bit their incompetence.

A smoothed earnings link similar to what they have Australia , because of the cost of the state pension triple lock is massively expensive.

How can anyone live in luxury on 12k a year? Please, can you explain how a pensioner on 12k a year lives in luxury?

Do you actually know what salary sacrifice is?

I'm in HR, and since I work interim and freelance roles, I see a LOT of pension scenes. Very few use salary sacrifice. In fact, I have introduced it in two places.

Most final salary type schemes can't use it, so that takes most of the public sector out of this issue.

I've set up Nest-type schemes three times now, on the auto enrol system, and they don't use it.

Yes, your employer will take your pension from your salary, but that itself is not what salary sacrifice means.

As some posters have said, the employer saves the NI as well as the employee (I suspect more have started to look at it now NI has increased for employers). And some employers gift it back to the employee, into their pension, as once it is set up that way there is no real cost to the employer (there's a bit of admin because you do need some specific contract terms around it, and changes to payments etc are more restricted), or some gift half back and keep half.

If it's only after the first £2k a year, that also takes out a lot of lower earners from the issue.

And salary sacrifice cannot be used for anyone who is on or earns not much over minimum wage. That takes another raft of people put of this.

So, it's another of those things that will impact the employer more, and better paid employees (of which I am sort of one, but my employer scheme is not sal sac, though it was on my list to look into bringing in). The latter I can get behind. I'm starting to feel that employers are getting the brunt of things right now.

No, everyone's pension is not set up that way. Under 40% are. Almost no public sector are.

You were suggesting that you were worse off than people on the living wage. I pointed out that they often have mortgage/rent, childcare and travel costs. Do you genuinely believe that you are worse off than all people on the living wage? 80% of pensioners own their own homes, very few have childcare or daily commuting costs. That’s why the pension is at at a lower level. Clearly you are struggling and I don’t know what has happened in your life that has meant you have got into this position. But we cannot pay pensions the equivalent of a living wage when they don’t have the same outgoings as those on a living wage. There is no magic money tree.

Well that’s fine then isn’t it, as long as it doesn’t impact the public sector, it’s all OK. And you wonder why Labour are so unpopular…

Off topic I know, but surely when working out whether or not someone is a net contributor over their lifetime, you factor in their own schooling, not their children’s?

You just sound bitter and moany

What exactly do you want or expect to happen?

Pensioners aren’t to blame for government mismanagement. They worked too to fund the pensioners of their day.

But what’s the point then? You’d be far better off just saving to an isa, etc if there’s no tax break. No one’s going to pay into a pension if they have to pay tax on the way in, then on the way out too, and not be able to access it till they retire (suspect the lump sum will be removed too before I retire).

I haven't asked for the living wage. I am just sick of being blamed for all society's ills. Do you want us all to die so we aren't a drain on society anymore.
I don't expect to be better off than someone working but I don't want vilifying for wanting a worry free retirement.

Public sector workers are having their taxes increased too. If you want one of these ‘amazing’ public sector pensions then perhaps try a public sector job with their shit hours, shit conditions and shit pay. Nope, didn’t think so

That's the public sector whose contribution rates have increased by 50% since the turn of the century whilst the benefits have decreased. You're right, no impact at all.

Where on earth did I say that? It was commented that the state pension was half of the living wage, I explained the reason for that.

I think you are misunderstanding how businesses operate. They don't say oh look, the extra NIC last year is £250k less profit, hey ho. And now we can't save NIC on salary sacrifice, another £250k, ah well it is what it is.

They say we budgeted to make £X amount of profit this year, looks like we are going to have to make a few people redundant. No extra money for the Treasury.

May I remind you that there are almost no final salary or career average pensions available now for those in the private sector. They were ended under the last Labour government. Yes, public sector pensions have got worse, but private sector pensions have got a lot, lot worse.