Sarah earns £55,000. She's a higher-rate taxpayer, paying 40% on everything above £50,270. Her employer offers pension salary sacrifice — and it changes everything.
Without sacrifice, if Sarah wanted to put £500 into her pension each month, she'd first pay 40% tax and 2% NI on that money. She'd take home about £290, then contribute to a pension from her net pay and wait months for HMRC to refund the higher-rate relief.
With salary sacrifice, the full £500 goes straight from her gross pay into her pension. She never sees the tax or NI. Her employer also saves 13.8% NI on that £500 — and good employers pass some or all of that back into her pension too. That's an extra £34.50/month she never would have seen.
*At 7% annual growth with employer NI contribution
→ Action: Email HR today. Ask about salary sacrifice and whether they share NI savings.