Much has been written on the subject of salary sacrifice
for pension contributions for a good reason – in most
situations, the concept is a 'no brainer'.
Many people have seen a fall in their disposable income over the
last two to three years. As such the attraction of saving national
insurance (NI) on pension contributions that they are paying
personally will far outweigh the potential impact on certain
earnings-related state benefits, most of which may never become
payable.
A cynical view perhaps? Maybe, but governments in general seem
intent on chipping away at benefits for those in work. We have had
technical changes to the state earnings-related pension scheme and
its MKII version, the 'state second pension' (S2P),
restrictions on exempt childcare vouchers for higher-rate taxpayers
and reduced access to incapacity benefits, etc. Perhaps a 'bird
in the hand' might not be such a bad idea?
