Salary sacrifice help!!

[mumonthehill]

Please can someone help me understand if this is a good idea as getting conflicting info. Salary is £33,890. Employer pays 5% pension and I pay 3%. How much would i lose per month if I go down this route. The pension provider seems to think I will not lose any salary as it all balances out but then when i used a calculator online it was a bit different. Would I benefit from doing this. I am 50 this year so any extra into my pension would be good.

I’m no expert but I think you gain around £85 into your pension but will loose around £61 of your monthly salary if you sacrifice 3%

Maybe someone more knowledgeable will be able to confirm!

The question isnt clear to me. Is your question how much will you lose by contributing to your pension via salary sacrifice vs not contributing? If so, assuming standard personal allowance, no benefit in kind, etc I believe your take home pay would reduce by £61.02 per month, and you would put £225.93 into your pension ( pension contribution would be £84.73 from you + employers contribution of £141.20.)

So
3% salary sacrifice = take home of £2,265.69
0% pensiom contribution = £2,326.71

Just wanted to add now I understand pensions, I would always pay into the pension, (and prefer salary sacrifice), otherwise you are basically losing the employer contribution.

In the above scenario, you dont have access to £61 per month or £732 year BUT you are saving £2711 per year into your pension

Apologies if i have misunderstood the question 😀

Remember you don’t pay tax on the amount you sacrifice which is a saving too. You don’t see it but it goes into your pot not to HMRC.

Thank you!! Really helpful. I was just a bit bamboozled by the presentation about it this morning but it sounds as if it would be worth doing. I definitely need to maximise my pension.

@Anon1231990 yes that was my question!

Sorry, wasn't trying to be difficult, I just wasnt sure if it was related to the salary sacrifice vs auto enrolement vs at source methods of contributing.

I agree, it is definitely worth doing, if you can lose the short term cashflow then not doing it basically means your are turning down free money from your employers, and you will pay more in tax and NI over your employment. Wish I had looked into pensions much sooner, like you i was completely bamboozled before and I have missed out on a lot I could have been saving! We live and learn 😁