New salary sacrifice prices

[GeorgeSymonds]

I am a bit confused as to how much this would impact NHS pension

I was quoted just less than £900 gross with £111 pension payments with a net of £600 a month on a 3 year lease (salary sacrifice)

would my pension just be reduced by £111 x 36 or does my overall gross pay get taken into account ?

thanks

I'm not sure this is the best place for pension advice as NHS pensions have been a hot topic and do not appear to follow the usual norms.

My limited understanding and at the risk of confusing matters, but to help point you towards further reading is part of the issue is when you give the car back. Your salary goes back up, your pension entitlement therefore also goes up and the way they do the sums that looks like a massive cash injection into your pension fund which exceeds the maximum contribtions allowed per year and gets taxed heavily.

If you have the car when you retire, your pension is based forever on the reduced salary even after you give the car back.

At this point I suggest you get more detailed advice and guidance from your union or trade association (like the BMA) and putting things into the context of your position. The long and short is it can be complicated for people in the NHS pension scheme

 

[niksam51]

Thanks will do

 

[gangzoom]

I am a bit confused as to how much this would impact NHS pension

I was quoted just less than £900 gross with £111 pension payments with a net of £600 a month on a 3 year lease (salary sacrifice)

would my pension just be reduced by £111 x 36 or does my overall gross pay get taken into account ?

thanks

Your NHS pension pay out is based on monthly contributions which is guaranteed to grow at inflation+1.5% with zero risk (so over double digit growth for the 12 months). You will struggle to find any private pension that's grown at 11.6% over the next 12 months, certainly without willing to take a gamble on very risky products.

Blog | Larking Gowen

www.larking-gowen.co.uk

Personal situations vary, but once you take into account loss in pension payout longterm the NHS salary sacrifice 'deals' are no better than normal PCP/HP costs. The difference is you are essentially giving up what is an unbeatable pension product in the current turbulent financial markets for a rental car.

 

[gangzoom]

Your salary goes back up, your pension entitlement therefore also goes up and the way they do the sums that looks like a massive cash injection into your pension fund which exceeds the maximum contribtions allowed per year and gets taxed heavily.

I believe the tax deductions with NHS pensions are now largely resolved with latest changes to the rules. Though Labour is likely to change the rules again at some point so who knows what's coming.

 

[niksam51]

Your NHS pension pay out is based on monthly contributions which is guaranteed to grow at inflation+1.5% with zero risk (so over double digit growth for the 12 months). You will struggle to find any private pension that's grown at 11.6% over the next 12 months, certainly without willing to take a gamble on very risky products.

Blog | Larking Gowen

www.larking-gowen.co.uk

Personal situations vary, but once you take into account loss in pension payout longterm the NHS salary sacrifice 'deals' are no better than normal PCP/HP costs. The difference is you are essentially giving up what is an unbeatable pension product in the current turbulent financial markets for a rental car.

Thank you for this