Having looked after Malcolm for several years with his future retirement needs and investments, his employment changed affecting his rate of tax and amount that could be put into his pension.
Through discussions, we recommended ‘Salary Sacrifice’ with the agreement of Malcolm’s employer. Malcolm gave up part of his salary and, in return, his employer gave non-cash benefit that is exempt from tax and National Insurance.
Once he accepted salary sacrifice, his monthly income reduced, but as he no longer paid the Pension Contribution himself, there was an actual increase in real terms.
As his employer did not have to pay the Employers’ National Insurance contributions, this saving was passed to Malcolm in the form of additional Pension contributions from the business, so he had more money paid into his Pension.
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