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Leasing Model 3 via Salary sacrifice

We are just getting setup as a company. Octopus EV (Fleet Evolution I think...) have been nominated.

We had 2 initial quotes:

SR+, 25k miles, 48months, Lower Tax Band, Maintenance, Tyres, Gap insurance, MOT
Gross £808, Net £550 + insurance.

LR, 25k miles, 48months, Lower Tax Band, Maintenance, Tyres, Gap insurance, MOT
Gross £896, Net £610 + insurance.

As I had the chap on the phone, we ran through an equivalent quote but without the maintenance, tyres & gap insurance and it worked out roughly £45-50/m less which I thought was pretty reasonable.
 

gangzoom

Active Member
May 22, 2014
1,601
1,503
Uk
ive got a feeling the nhs offer the best deals as it affects your pension contributions so they want you to take out a car, I could be wrong

Not all NHS trusts offer great deals, our trust is not great at all. The trusts are always looking to reduce costs so salary sacrifice is pushed alot, the pension costs the trust a massive 14.5% as employer contributions and rising to 20% next year!!!

Unless you take into account pension effects you simply cannot compare NHS 'deals' with non NHS ones.

The reason the impact is so big is because how generous the NHS pension is, even on the new 2015 scheme. Essentially you get an annual growth equivalent to 1/54 of your pre tax salary each year, compounded by a guaranteed inflation+1.5% growth.

For me that figure is scarly believable even if I forget my previous 15 years of contributions and started a new pension from scratch today at nearly 40 years old. Its probably one of the most valuable financial rewards for working in the NHS.

I've never met or seen a single independent pension advisor who would suggest opting out, but yet apparently opt out rate is more than double digits. Its so poorly explained most staff don't understand it, and when added with crippling moral problem in the NHS many just leave the scheme:(.

Should I opt out of the NHS pension scheme? What are its benefits? | This is Money
 
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Not all NHS trusts offer great deals, our trust is not great at all. The trusts are always looking to reduce costs so salary sacrifice is pushed alot, the pension costs the trust a massive 14.5% as employer contributions and rising to 20% next year!!!

Unless you take into account pension effects you simply cannot compare NHS 'deals' with non NHS ones.

The reason the impact is so big is because how generous the NHS pension is, even on the new 2015 scheme. Essentially you get an annual growth equivalent to 1/54 of your pre tax salary each year, compounded by a guaranteed inflation+1.5% growth.

For me that figure is scarly believable even if I forget my previous 15 years of contributions and started a new pension from scratch today at nearly 40 years old. Its probably one of the most valuable financial rewards for working in the NHS.

I've never met or seen a single independent pension advisor who would suggest opting out, but yet apparently opt out rate is more than double digits. Its so poorly explained most staff don't understand it, and when added with crippling moral problem in the NHS many just leave the scheme:(.

Should I opt out of the NHS pension scheme? What are its benefits? | This is Money

You are right, the NHS pension is probably the most amazing you can find but...

The opt out rate is likely to drop now that the max has been adjusted. Same reason there were early retires. If you hit the cap you get a huge bill from HMRC and it's not particularly straightforward to calculate.
 

gangzoom

Active Member
May 22, 2014
1,601
1,503
Uk
If you hit the cap you get a huge bill from HMRC and it's not particularly straightforward to calculate.

I have to say though having a pension pot so big/pay out so high to be taxed on it substantially with zero risk risk or effort from your part is what I would call 'a nice problem to have'.

Am 30 years away from retirement and apparently I'm already over the £40K/year pension pot tax free growth amount and I'll almost certainly get a big tax bill at retirement. At some point I may actually look into salary sacrifice to reduce my pension contributions, but given the state of the economy at present, been in a fortunately position of having a big + 100% guaranteed pension pot with no risk to me is something very comforting.
 
I have to say though having a pension pot so big/pay out so high to be taxed on it substantially with zero risk risk or effort from your part is what I would call 'a nice problem to have'.

Am 30 years away from retirement and apparently I'm already over the £40K/year pension pot tax free growth amount and I'll almost certainly get a big tax bill at retirement. At some point I may actually look into salary sacrifice to reduce my pension contributions, but given the state of the economy at present, been in a fortunately position of having a big + 100% guaranteed pension pot with no risk to me is something very comforting.

I don't think NHS salary sacrifice makes a difference when it comes to annual allowance pension calculations. Still counts as income in this circumstance. Not sure about lifetime allowance though.
 
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Reactions: gangzoom
I have to say though having a pension pot so big/pay out so high to be taxed on it substantially with zero risk risk or effort from your part is what I would call 'a nice problem to have'.

Am 30 years away from retirement and apparently I'm already over the £40K/year pension pot tax free growth amount and I'll almost certainly get a big tax bill at retirement. At some point I may actually look into salary sacrifice to reduce my pension contributions, but given the state of the economy at present, been in a fortunately position of having a big + 100% guaranteed pension pot with no risk to me is something very comforting.

Yes but that's different to breaching your annual allowance which would incur an immediate tax bill.

I don't think NHS salary sacrifice makes a difference when it comes to annual allowance pension calculations. Still counts as income in this circumstance. Not sure about lifetime allowance though.

Correct. You can opt to have the payment taken from your pension if over than £2000 but just easier to not have to deal with that.
 

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