Are there any disadvantages to applying a Salary Exchange/Sacrifice pension scheme?

As the employee's gross pay is lowered by way of the sacrificed amount, their post pension salary will be lower. This could impact the following:

• Any benefits provided by the employer (such as life cover).
• Lower statutory payments, or non-eligibility to statutory payments such as maternity pay, sick pay, redundancy pay and shared parental pay.
• Some employees will be unable to join the new scheme as the sacrifice takes them below the minimum wage.
• Some mortgage/loan providers will only take into account the post pension salary amount.

Updated on: 15/02/2022