Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Original poster

chilcare salary sacrifice schemes will affect pension now.

12 replies

Bodicea · 24/03/2015 16:54

It feels like they give with one hand and take away with another!!

Not sure whether it is a good idea to stay in the salary sacrifice scheme. I currently claim the full amount. But as I work for the NHS my pension is about to change and won't have final salary salary scheme.

Anyone in the same boat, a bit more knowledgeable?

OP posts:
Original poster
Bodicea · 24/03/2015 16:57

Will it affect my pension that much?

This might sound silly as happily married but I worry that the savings I make now are for us as a couple (I am the only one that claims). But it will only be my pension affected in the future and should the worst happens and we split up it will be me alone that suffers. IYSWIM.

OP posts:
whooshbangprettycolours · 24/03/2015 21:34

Dare your sure the CARE is not notional salary (ie before benefit sacrifice)

lovingmatleave · 24/03/2015 21:41

I know what you mean. I am public sector worker with pension deducted from salary, but childcare vouchers taken off at source, so effectively there is a bit less going into your pension every month.

However what worries me is that little bit every month less into your pension, could over a number of years end up being well, quite a lot. But its very difficult to work out as it depends for how long you are in the scheme, how much you earn, and what the performance of your pension fund is etc. I do think every little bit extra you can afford to put into a pension helps for future finances.

I have considered ditching the salary sacrifice and just paying childcare costs ourselves out of our joint account for bills. Especially as I don't earn much compared to my husband who also has very good pension provision. Its inertia that has stopped me so far, yet I find time to write about it on mumsnet!! Also keep meaning to start paying AVCs which is something I presume you could consider too.

IfMaybeBut · 24/03/2015 21:49

The changes in NHS pensions do mean your pension pot will be affected by taking salary sacrifice. You make a tax saving but it will affect the pension. I think that I would favour my pension

Original poster
Bodicea · 25/03/2015 08:39

Sorry what is avc's ?

OP posts:
Original poster
Bodicea · 25/03/2015 09:50

Looked into avc's. Interesting.
I brought it up with dh.
Told him I love him but I know what a ruthless so and so he can be once you are off the bus so to speak and I want to protect myself a bit more. My pension is already gonna be way smaller than him due to working part time. So suggested that the money we save from salary sacrifice ( and poss a bit more) I use to purchase avc's. Does that sound like a plan?

OP posts:
EmilyMaud · 25/03/2015 18:48

I have worked part time for 10 years now. I only have £20 a month coming out for the childcare salary sacrifice scheme nowadays. We had both been getting the maximum amount and had built up a surplus. I am hoping that the £20 won't make much difference to the pension. I had no idea about this btw!
I am NHS too.
I need to look into AVC's too as ten years working part time will have made a big dent in my pension!

mamapants · 25/03/2015 18:54

It depends what percentage you pay pension. If say you pay 10% and use max 243 a month you'd be paying about 24 less a month into your pension. Don't know how much difference that would make long term.
Does your partner also use childcare vouchers?
Also am sure you are aware that h at from August on you can get your tax relief on childcare through a new central scheme which wouldn't effect your pension.
In most cases it provides the same financial benefit.

Original poster
Bodicea · 25/03/2015 19:15

Emily- the 95 and 98 pension schemes on nhs don't get affected unless taken in the sat 3 and 10 years respectively but as new 2008 scheme is career average it is affected more.
Dh doesn't get vouchers as he is self employed.

I didn't realise new scheme didn't affect your pension mama pants. I remember something about a new scheme but was told I was better off on this due to number of hours I work. However I hadn't factored in pension at that point.

OP posts:
Original poster
Bodicea · 25/03/2015 19:16
  • next not sat. Excuse My fat thumbs on iPhone
OP posts:
mamapants · 25/03/2015 19:52

Well I can't remember the ins and outs of the new scheme but it is more like a tax rebate you put in your after tax earnings in and the government then top it up so it's separate from your wages. So pension wouldn't be affected.
I can't remember the different scenarios of who is better off in which scheme, off the top of my head it was mainly higher rate tax payers who joined pre 2011 who are better off with the voucher scheme. I think you can find calculators online to check

Chchchchangeabout · 25/03/2015 19:58

Bodicea I think the new scheme may also be open to you if you are self-employed. Definitely worth checking out.

New posts on this thread. Refresh page