Salary sacrifice pensions might sound complicated, but they’re one of the smartest ways to boost your retirement savings and save on tax while you’re at it. At Thrive, we’re all about making money feel manageable, not overwhelming. So, here’s everything you need to know...

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What Is Salary Sacrifice?

Salary sacrifice is a simple agreement between you and your employer. You give up a chunk of your gross salary, and they pay it straight into your pension instead. The bonus? You pay less National Insurance, and your employer saves too (They may even pass some of those savings back into your pot). It's a smarter way to save more without taking home less.

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The Upsides

Let’s start with positives. First, you’re growing your pension faster - not just with the extra money that you’re putting in but with the extra employer contributions and tax relief. It’s a powerful way to boost your future finances without feeling the pinch today.

Because you’re technically earning less, you will also pay less in National Insurance (NI). That means more in your pocket right now, and more in your pension for later. And if your employer is on board, getting started is easy and fully HMRC-approved.

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What to Watch Out For

Given the name of the scheme you would have assumed that there will be some sacrifices. Firstly, your official salary will look lower on paper, which might affect things like mortgage applications or certain benefits. And, as you would expect, you can’t sacrifice salary below the National Minimum Wage, so it’s not right for everyone.

It’s also worth thinking about how it could impact things like maternity or paternity pay - small trade-offs that could matter depending on your situation.

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Is It Worth It?

For a lot of people, yes. If you’re earning above the minimum threshold and want to build up your pension without impacting your day-to-day spending, salary sacrifice is a purpose built for your situation. You’re saving smarter, keeping more of your take-home pay, and setting yourself up for a stronger future.

Just make sure you’ve considered how it fits into your overall financial picture. If in doubt, the Thrive team are always here to answer any questions you might have.

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How Thrive Makes It Easy

Setting up salary sacrifice sounds a lot more complicated that it actually is to achieve. At Thrive we strip out all the unnecessary stuff and show you exactly how salary sacrifice works and how it may benefit you. Use Thrive to:

· Calculate your savings instantly

· Adjust how much you’re paying in with just a few taps

· Combine pensions for a clearer view

· Get expert support when you need it

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Salary sacrifice might be one of the most underused tools in your financial toolkit. It helps you save more, spend less on tax, and grow a pension that works for your future.

If that sounds right for you log in to Thrive and chat with one of the team today.

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