PENSIONS
Five top tips for salary sacrifice pension success
arrangement with a contract amendment, clearly outlining the agreed-upon salary reduction and the exchanged benefit.
5. Monitoring and review Regularly review the scheme’s
effectiveness and address any issues or concerns. Make necessary adjustments to ensure it continues to meet the needs of both employers and employees. A salary sacrifice pension may not be suitable for everyone, particularly those earning close to the national minimum wage (NMW). It must not reduce an employee’s cash earnings below the NMW. Due to this, it’s important to seek out guidance. More information on salary sacrifice can be found at: l the People’s Pension website: https://ow.ly/rQHP50W2qWv l the Money Helper website: https:// ow.ly/wcP250W2qXu. n How we can help Contact us for help setting up salary sacrifice as part of your pension scheme. At People’s Pension, we put our members first. We use our profits to help people build better lives, not to reward shareholders. We call it profit for people. It means everything we do is focussed on making your employees’ pension journey easier and fairer. You can get in touch here: https://ow.ly/ geax50W2s0O.
1. Employee education and consent Provide comprehensive information about the scheme, including potential benefits, tax implications and any changes to take-home pay or other means-tested benefits. Ensure employees fully understand the consequences before agreeing to participate and that they know about their right to opt out.
3. Payroll software Work with your payroll provider to ensure salary sacrifice is accurately reflected in your payroll software and that it manages the correct pension contributions.
4. Compliance and reporting Familiarise yourself with relevant tax
2. Contractual changes Document the salary sacrifice
regulations and ensure you correctly report any benefits to HM Revenue and Customs.
* This example of employee savings is correct as of 06/04/25.
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| Professional in Payroll, Pensions and Reward |
Issue 112 | July-August 2025
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