'I'm £9,000 a year better off thanks to work scheme - more people should use it'
One man has explained how he has boosted his pension pot by around £9,000 a year by opting into a workplace scheme.
Caleb uses salary sacrifice to exchange some of his salary for pension contributions. As well as increasing your retirement pot, salary sacrifice also reduces your tax bill, as the deduction is taken from your gross salary.
This means you may find your take-home pay actually goes up. However, you should be aware of the potential impactions of salary sacrifice if you are taking out credit.
For example, mortgage lenders often calculate your affordability based on your gross salary, so a lower salary might reduce the amount you can borrow.
Caleb said: 'I've opted into a salary exchange scheme primarily for the pension tax benefits and National Insurance savings. It's been a smart move financially, and I've noticed the long-term gains in my pension contributions without affecting my take-home pay much.
'The opt-in process was fairly straightforward. My employer had clear steps laid out, and the HR system made it easy to enroll. There were no major complications.
'Our HR team provided a simple guide explaining how salary exchange works and the benefits. They were also available for any questions, which helped clarify the impact on payslips and pension growth.'
New figures from Scottish Widows show workers could boost their pension pots by £41,200 by opting into salary sacrifice. Someone with an average salary of £37,430 would increase their pension pot by £528 a year.
For a worker aged 30 and retiring at age 67, and assuming 5% investment growth, this would add £41,200 to their pension savings by the time they retire.
Susan Hope, Scottish Widows Retirement Expert, commented: 'Questions loom over the future of salary exchange, despite it being the best way to maximise workers' retirement savings.
'Cutting or abolishing it completely would ignore the long-term boost it delivers to people's finances. Our data shows not only the positive impact on people's take home pay, and pension wealth, but also the halo effect it has on people's financial confidence.
'The term 'salary sacrifice' is a red herring because neither the employer nor employee has to give anything up when they take advantage of this scheme. It's truly a win win.
'The key to unlocking additional savings into pensions is awareness, and this needs improving so schemes like salary exchange can positively impact more people's finances. We should be empowering our workforce's future and salary exchange is one way to do this.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mirror
10 hours ago
- Daily Mirror
DWP state pensioners to get surprise payments in bank accounts on Friday
The Department for Work and Pensions (DWP) has issued a reminder to state pension and Pension Credit claimants across the UK that their payment dates are set to change this week State pensioners have been advised that payments are set to hit accounts on Friday, earlier than normal. Those claiming State Pension and Pension Credit across the UK are being reminded that their payment dates will change for this week. Older people have been reminded thousands of Department for Work and Pensions (DWP) benefit claimants are set to be paid earlier due to the Bank Holiday. Due to the holiday on Monday, August 25, 2025, those normally scheduled to receive funds that day will instead find the money in their accounts on Friday, August 22 - a full 72 hours before the initially proposed and agreed date. It comes as DWP confirms new Winter Fuel Payment deadline with pensioners urged to act now. READ MORE: DWP confirms when it will start taking payments straight from bank accounts Fiona Peake, Personal Finance Expert at Ocean Finance, warns: "Getting your money on Friday instead of the Monday might feel like a win going into the long weekend, but it means you'll have three extra days to stretch it." She advises treating Friday, August 22 as if it were the usual payday and planning the week as normal. The day your pension is paid depends on your National Insurance number, and you might be paid earlier if your normal payment day falls on a bank holiday. The last two digits of your National Insurance number determine your payment day of the week. If they are between 00 and 19, you are paid on a Monday, reports Birmingham Live. If they are between 20 and 39, you are paid on a Tuesday, between 40 and 59 means you are paid on a Wednesday, and codes between 60 and 79 and 80 to 99 mean payments are made on Thursdays or Fridays respectively by the DWP. The DWP website advises: "After you've claimed your State Pension you'll get a letter about your payments. The new State Pension is usually paid into your account every 4 weeks. If you want to change the account, tell the Pension Service. There are different rules if you live abroad." Welfare payments such as Universal Credit and Personal Independence Payments (PIP) are also being paid early due to the August bank holiday. How often you get paid depends on what type of benefit you claim. For example, you'll get paid Universal Credit on the same day each month, while Tax Credits are typically paid by HMRC every four weeks or weekly. Child Benefit is usually every four weeks on a Monday or Tuesday - so you'd only be affected by one of the bank holiday days over Easter.
Wales Online
11 hours ago
- Wales Online
How many years you need to work to get full new state pension
How many years you need to work to get full new state pension The full New State Pension payment is £230.25 a week but to get this you'll need to have paid a certain amount of National Insurance contributions - find out how many years you need to work here The Department for Work and Pensions (DWP) has released the latest figures showing that the State Pension currently provides a steady financial income for 13 million elderly people across the nation. This benefit is available to those who have reached the UK Government's eligible retirement age, which presently stands at 66 for both men and women, and have made at least 10 years' worth of National Insurance (NI) contributions. However, many individuals nearing retirement age may not realise that to receive the full New State Pension payment of £230.25 each week, they will need approximately 35 years' worth of NI contributions. This figure is merely an average as some people may have been 'contracted out' and will require more NI contributions to qualify for the full amount - further information about this can be found on For money-saving tips, sign up to our Money newsletter here . Workplace and private pensions will supplement the State Pension in retirement, but many people may be depending on the contributory benefit as their sole income in retirement, so it's vital to understand how many years you will need to make NI contributions to receive the maximum payout. The State Pension age is scheduled to rise to 67 between 2026 and 2028, with a further planned increase to 68 set to occur in the mid-2040s, reports the Daily Record. If you're concerned about the number of years you need to work - whether retirement is a distant prospect or just around the corner - our helpful guide below should clarify how National Insurance contributions influence the amount of State Pension you'll receive. Article continues below How to qualify for any New State Pension payment You'll need at least 10 qualifying years on your National Insurance record to be eligible for any State Pension, but these don't have to be 10 consecutive years. This means that for at least 10 years, one or more of the following applied to you: you were employed and made National Insurance contributions you received National Insurance credits, for instance if you were jobless, ill, a parent or a carer you made voluntary National Insurance contributions Even if you've lived or worked overseas, you might still be able to receive some New State Pension. You may also qualify if you've made married women's or widow's reduced rate contributions - learn more about this on the website here. How to receive full New State Pension payments The first thing to understand is that 'full' refers to the maximum amount of New State Pension a person can get. You'll need approximately 35 qualifying years to receive the full New State Pension if you don't have a National Insurance record before 6 April 2016 - this could be more if you were 'contracted out', find out more here. For individuals who have contributed between 10 and 35 years, they are entitled to a portion of the new State Pension, but not the full amount unless they purchase additional NI years. Qualifying years if you're working When you're employed, you pay National Insurance and earn a qualifying year if: you're employed and earning over £242 a week from one employer you're self-employed and paying NI contributions You might not be paying National Insurance contributions because your earnings are less than £242 a week. However, you may still earn a qualifying year if you earn between £123 and £242 a week from one employer - find out more here. Qualifying years if you're not working You may receive National Insurance credits if you're unable to work - for instance due to illness or disability, or if you're a carer or unemployed. You can receive National Insurance credits if you: claim Child Benefit for a child under 12 (or under 16 before 2010) receive Jobseeker's Allowance or Employment and Support Allowance are in receipt of Carer's Allowance If you're not working or receiving National Insurance credits You might be able to make voluntary National Insurance contributions if you're not in one of these groups but wish to increase your State Pension amount. Find out more on the website here. What if there are gaps in your National Insurance record? Even with gaps in your National Insurance (NI) record, you can still be eligible for the full New State Pension. A State Pension statement can provide information on how much State Pension you might receive. You can also request a National Insurance statement from HM Revenue and Customs (HMRC) to verify if there are any gaps in your record. If your National Insurance record has gaps that could hinder you from receiving the full New State Pension, you might have the option to: Article continues below Acquire National Insurance credits Make voluntary National Insurance contributions Verify your State Pension age Use the free online tool on the website to check your State Pension age and determine when you can retire and start claiming your State pension.
The Herald Scotland
a day ago
- The Herald Scotland
Japanese restaurant in Glasgow to close next month
The owners of the venue are set to launch a new venture by the River Clyde, and have announced that Mikaku will close on September 14. Director Nathan Sparling said: 'Closing Mikaku was not an easy decision. Read More: "It has been a truly special place for both our team and our guests, and we are incredibly proud of what Mikaku has achieved. "From celebrating Ramen Week with £1 bowls, to launching one of Glasgow's most innovative cocktail menus, to introducing a real Robata Grill to the city for the first time – Mikaku has been about bringing something bold, different, and authentic to Queen Street, seven days a week. "The memories created here, and the community that has grown around it, will always be a huge source of pride. "But like so many venues in Glasgow and across the UK, we've faced the well-documented challenges in hospitality – from rising costs and staffing pressures, to shifts in consumer behaviour. "The recent rise in National Insurance contributions has added even more pressure, strangling independent operators like us at a time when the sector is still recovering. These wider challenges have been a significant factor in the decision to close, allowing us to refocus our efforts and resources on the exciting opportunity ahead at Clydeside Containers.'
