Pensions Salary Sacrifice Negatives?

[KRL]

My company is switching over to a new pension scheme where pension contributions can be (but don't have to be) made via salary sacrifice. Currently they are not made by salary sacrifice.

Are there any big reasons not to switch over to salary sacrifice on pension contributions? From my brief research the main negative appears to be that a lower monthly salary could have an impact on mortgage applications and similar. I don't think this will be an issue for me at the moment as have a good LTV in my current house and no pressing need to move.

Bit about me - I'm a higher rate tax payer and not claiming child benefit. Have a family of 4 - wife and two kids.

Thanks in advance.

Edited by KRL on Wednesday 18th April 10:15

[Eric Mc]

If you claimed Child Benefit, how much of it would you have to pay back?

[KRL]

Hi Eric,

I'd have to pay all of it back.

Edited by KRL on Wednesday 18th April 14:05

[Eric Mc]

The Child Benefit clawback is based on your taxable income after taking into account Pension Contributions. The pension contributions do not have to be part of a salary sacrifice scheme.

The main drawback of salary sacrifice is that your P60s show a reduced Gross Salary amount - which could be detrimental if you needed to prove your gross salary levels for some other purpose (such as borrowing or salary negotiating for a job with a new employer.

[alock]

KRL said:

Are there any big reasons not to switch over to salary sacrifice on pension contributions? From my brief research the main negative appears to be that a lower monthly salary could have an impact on mortgage applications and similar. I don't think this will be an issue for me at the moment as have a good LTV in my current house and no pressing need to move.

Nationwide were happy to accept my real salary based on a combination of pay slips, a letter from my employer stating my salary along with the salary sacrifice amount, and my annual pension statement confirming the amount paid in every month.

[Eric Mc]

Lenders are fairly clued up on how salary sacrifice effects headline Gross Wagers - so will these days take that into account.

[Derek Chevalier]

KRL said:

Bit about me - I'm a higher rate tax payer and not claiming child benefit.

Does your wife work?

[bogie]

I thought the benefits of salary sacrifice were being addressed by HMRC so it was no longer so worthwhile ....maybe has not come into effect yet ?

https://www.gov.uk/government/publications/income-...

[xeny]

I think that's aimed at benefits in kind specifically excluding pension payments (amongst other BiKs), which is what the OP was asking about.