Salary Sacrifice

by Richard Allum on 1 April 2008

Steve Bee of Scottish Life is always a good source of insightful and very often amusing comment on pensions. In his latest BeeLine he refers to a very helpful document on salary sacrifice and how it works that has been produced by Her Majesty’s Revenue & Customs (HMRC to the trendy). Having read it myself, I agree that every financial adviser, and of course paraplanner, should read it.

It’s a genuinely helpful document and will be very useful to advisers at a practical level and also, as it is produced by HMRC, has the benefit of being straight from the horse’s mouth, so to speak. It explains the effect of salary sacrifice on State Pensions, benefits and Tax Credits, as well as contribution-based benefits like Incapacity Benefit, Jobseeker’s Allowance, Maternity Allowance, etc. etc.

You can download the document by clicking here.

There are also loads of useful links included in that document.

If this all serves to whet your appetite for the subject you might also want to revisit two ancient BeeLines on the topic which even today, years after their first appearance on the BeeHive, still remain two of the most visited pages on the site. The links to them are here for you:

We are still using salary sacrifice as a tax efficient planning tool especially at bonus times and also tax year end planning in conjunction with input period changes.

{ 1 comment… read it below or add one }

Ian Lees 22 October 2008 at 7:07

I have found SIPP Centre to be a most efficient facility for Pensions,
The staff are helpful and unlike the problems at Scottish Widows – where theeir Trustees do NOT act impartially to members. Furthermore the clents have benefitted more by using the SIPP Centre facility and now they are able toplace contracted out benefits into SIPP’s and insurance companies are awash with htese old contracted out schemes. FOr example Scottish Widows set up arrangements through companies – “pensionbuilder “, through the Unions eg electrical. Now that SIPPs can accept these there is a large market waiting – and givne the financial instability of companies like Scottish Widows, now owned by Edinburgh’s Trustee Savings Bank ( TSB ) advisers need to look at this area – to reduce the concern for scheme members. We need look no further back than Equitable Life – to see the devastation casued to scheme members and policyholders.

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