In challenging economic times it’s important that employers can demonstrate the valuable benefits they offer to staff, such as a good quality pension scheme. The latest Nest webinar aimed to help employers do just that.
With presenters from across Nest and guest speaker Jenny Wright from the Money and Pensions service, the webinar covered a Nest investment update on how we’re positioning our investment portfolios to aim to deliver growth over the longer term. Jenny’s presentation gave viewers some actionable tips to support employees during the cost of living-crisis and we finished with a session on salary sacrifice and how to run this for your employees.
All the presentations are available below to watch again or share with colleagues:
The slides from the webinar are available here: October employer webinar 23.
During the webinar we received a number of questions, answers to them can be found below
- Can you also have voluntary contributions in addition to normal employee contributions?
Yes, it is ok to pay extra contributions into Nest over the amount required that everybody pays. The employee’s extra contributions would attract tax relief in the same way as normal if they are deducted from net pay, as normal contributions are. If by salary sacrifice the extra amount they want to pay is sacrificed from salary and paid over to Nest as an employer contribution. Just add the extra amount to the figure you normally give us each pay period for each employee on your contribution schedule.
- Do you have an information sheet we can pass on to staff to start the conversation about salary sacrifice?
Salary sacrifice is primarily about the action the employer takes. The links on the last slide give you an explanation of how it works. The link to the Money and Pensions Service is an explanation for the employee. See Salary sacrifice and your pension | MoneyHelper
- What is the maximum pension contribution?
That is quite complicated. For most people it is £60,000 per annum, that includes employer and employee contributions and tax relief. See Tax on your private pension contributions: Annual allowance – GOV.UK (www.gov.uk)
As an employer this is not something you monitor, it is up to the individual to get their own advice in this area if they are close to the limits.
- Employer is with Nest but I want to salary sacrifice to another. Can I do this?
Yes, you can have more than one pension scheme. But Nest offers an attractive, quality pension scheme, so there is no reason not to use Nest for any extra contributions. Paying to two separate schemes adds to your administration and costs.
- When you say national minimum wage, is that gross pay?
Yes, that’s correct. See National Minimum Wage and National Living Wage rates – GOV.UK (www.gov.uk)
- How can salary sacrifice affect state benefits?
Any state benefit based upon earnings could be affected. This is not an area we can advise on as the rules for state benefits do change from time to time
- Can the increase of percentage contributed not go through payroll then direct to nest?
You need to get the extra amount onto the contributions you submit to Nest, as part of the single entry you make each pay period to us for the worker. Usually, the simplest way to do this is via payroll. Extra contributions can be submitted manually via exception schedule if you want to do so separately outside of your normal contribution cycle. See How to create an exception schedule | Nest pensions
- Is salary sacrifice restricted by pensionable earnings thresholds?
No. You do the sacrifice from the employee’s full salary. The HMRC link on our slides explains more on this.
Helpful links included in the presentations are below –
Money and pensions service quick links :
Resources are also available from the Money and Pensions service in different community languages. They offer a language line for anyone wishing to call in or leaflets/posters in Polish, Punjabi and many other languages.
Salary sacrifice quick links :
For employees: MaPS – salary sacrifice and your pension