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Is Anyone Familiar With Sxp Salary Exchange For Pension Contributions Scheme?

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winkyridg | 20:43 Wed 11th Sep 2019 | Business & Finance
5 Answers
My employer intends to include me within the above Scheme, i have no idea what it is, is anybody familiar with it and is it worth it financially for me to be included, will it affect my state pension when i retire etc etc or is it just a scheme my employer wants to be involved in to save them money, which wouldn't surprise me? any help would be greatly appreciated as many of my colleagues and i are not too sure what to do for the best, many thanks.


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SxP is a form of salary sacrifice, which you can find more information about on the Money Advice Service website:

yes, you'll probably save a bit on NI compared to a non-salary sacrifice pension contribution. But the main benefit is the same as that of all pension schemes- contributions are grossed up so there is a tax avoidance, and it's even better if the employer makes some form of matching contribution.
The links given here explain it well and I cant add much more except to encourage you to ask your employer for full information. Its quite shocking that they want to include you in a scheme but havent provided any details or access to advise.

Generally salary sacrifice is sound and the tax benefits are beneficial but it does depend how much you earn and whether you need your full salary rate for a mortgage quote or are considering any other salary related activity.
One of my former employers used salary exchange to gain pension money. However the money gained was not paid to me in my money purchase pension, but went towards paying off the company’s defined benefit pension deficit (of which I was not a member).

If too many companies get involved in the scheme (salary exchange), HMRC might decide that they are losing too much tax and close the loop hole that allows it.

If they do, hopefully they will not make it retrospective – HMRC can reclaim all lost tax if the scheme can be shown to be illegal (a deliberate ploy to evade tax payment).

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