Millions of employees could be missing out on the chance to beat National Insurance (NI) hikes and boost their take-home pay by using salary sacrifice.
The arrangement saves a worker on a £30,000 salary around £200 a year in NI*, while someone earning £50,000 a year saves about £330*. The employee’s pension contributions remain intact, and the employer also saves money on their NI payments. It also results in savings to businesses and yet by not doing salary sacrifice, UK businesses collectively could be losing out on a staggering £2.1bn.
Money saved could be retained by the employer. Or it could go a step further in helping employees feeling the pinch from the cost-of-living crisis, by funding education programmes that build their financial resilience, paying extra pension contributions, or paying into an ISA.
The smart use of salary sacrifice can put cash back into employees’ pockets, while also building engagement and loyalty to an employer, increasing workplace productivity and reducing absenteeism.
Download Cushon's 'Pensions Salary Sacrifice' whitepaper to learn how salary sacrifice can help your employees with the rising cost of living.
And if you'd like to get an estimate of how much money your company could be saving, you can do so in just a few steps by using our salary exchange calculator.
*Please note: these figures have been provided for illustration purposes only.
The benefits of using a salary sacrifice arrangement vary. Employers can find out more at https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye