UK Pension Salary Exchange

Creator
Creator
Seonglae ChoSeonglae Cho
Created
Created
2025 Jun 24 16:30
Editor
Edited
Edited
2025 Jun 24 16:52
Refs
Refs
Salary Exchange is a system where when employees convert part of their salary into a pension, National Insurance Contributions (NIC) from both the employee and employer are not applied to the converted amount. As a result, employees see an increase in their monthly take-home pay by the amount of reduced employee NIC, and employers also benefit from savings equal to the reduced employer NIC.

Pros

Take-home pay increases.

Cons

Nominal salary decreases, which may affect eligibility for income-based loans or benefits.
 
 
 
 
 
 
 

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