A fifth of companies could be incurring avoidable tax charges by failing to acquire advantage of initiatives these types of as salary trade, in accordance to Mercer’s outlined contribution (DC) MOT study.
Mercer mentioned that improvements working with salary exchange could preserve an employee countrywide insurance policies (NI) cost of up to 13.25 for every cent on their pension contribution though at the very same time, saving the employer 15.05 for each cent.
In gentle of this, it believed that an personnel with a pensionable wage of £40,000, shelling out an worker contribution of 6 per cent into their pension plan would help you save £318 for each 12 months and the employer would help you save £361 per calendar year.
For a firm of 1,000 workers, this would depict a saving of in excess of £360,000 for each year for the employer.
Commenting on the conclusions, Mercer DC MOT lead, Ken Anderson, said: “Mercer’s DC MOT analysis has determined substantial opportunities for firms to unlock greater cost savings and deliver greater rewards for their people today.
“In the confront of financial uncertainty it is essential that corporations of all sizes choose a mindful strategy to pensions and employee benefits.”
Calls for businesses to consider edge of salary sacrifice techniques have been compounded amid the charge-of-residing disaster, with modern investigate from Cushon revealing that savers could collectively be missing out on up to £1.9bn a year, though Scottish Widows has argued that the initiative can current a “win/win” amid the latest increasing fiscal pressures.
