Salary Sacrifice

[fancealot]

So i'm on an NHS lease with 20k miles per year over three years, I have been paying into my pension for 20 years and I am accepting that my (career average) pension is affected, BUT the savings i'm making on just switching to an EV (circa £80 per week diesel to £67 electric this month - total home electricity and charging) means I can put some money to one side every month into savings - possibly thinking of a private pension to top up my NHS one.

My salary sacrifice covers everything but the electricity going in (I even got a Podpoint charger as part of the deal). I'd definitely pay the extra to go for the LR.

It's a judgement call, I know that i'll be working for more than the 40 years of the NHS pension, so I'll be able to concentrate more on a private pension at a later stage.

 

[gangzoom]

@fancealot You will be roughly reducing your gross salary by about £1000/month, over 20 years leasing for 4 years will cost you about £1000/year reduction in pension contributions. So if you withdraw 20 years of pension post retirement it'll be about £20k without taking into account inflation.

I wouldn't bother trying to match a private pension with the NHS one, all stuff I've read suggests a private pension will cost substantially more.

A 4 year lease isn't terrible on pension payout, what is would be if you than decided to take out another lease afterwards. If you are near the top of the pay scale even the current Career Average scheme is still gold-plated, as it only started in 2015 so effectively acts like a final pension scheme!!

Even if I had no pension contributions, starting out at aged 40, retiring at 67, based on my current salary the pension calculators suggest my final pension is pretty much 50% of my current gross salary without taking into account guaranteed inflation +1.5% annual growth. You will struggle to find a private pension that comes close to this, with just 13% gross contributions (bare in mind marginal tax rates is close to 50% for net pay) and ZERO risk/work on my behalf!!