Impact of salary sacrifice on pension arrangements

Overview

Under a salary sacrifice scheme the council allows you to lease a car or purchase household or electrical items under a salary sacrifice arrangement. This means that your monthly gross salary will be reduced, resulting in an initial saving on tax however your tax code may be adjusted the following tax year following your P11D submission, National Insurance and pension contributions.

This guidance explains how this arrangement will affect your LGPS pension and gives details of how you could pay additional contributions to offset the reduction in your pension. (Members of other pension schemes should contact their provider to understand their position.)