View more on these topics

Sacrifice can beat NI trap

Standard Life marketing technical manager Andy Tully says the lowering of basic-rate tax, which will be introduced from April 2008, is good news for anyone earning £15,000 or more a year.

But Tully says the changes to National Insurance means that people earning above £35,000 will pay more in NI which will negate the benefits of the lower basic rate.

He says investors in this salary band should consider using salary sacrifice to pay their pension contributions because they will save significant sums on NI contributions.

Salary sacrifice is an arrangement between an employer and employee where the employee agrees to a reduction in salary or bonus in exchange for a non-cash benefit provided by the employer.

Taken as a payment into the employee’s pension scheme, it could earn an extra £300 to £600 a year in pension contributions.

Tully says: “By reducing the salary or bonus, employee and employer save on NI. The employee will benefit as a higher level of pension payment can be made without reducing take-home pay and the employer will benefit as they will pay reduced NI.”

Recommended

Preferred writes to packagers to clarify which criteria will apply to re-offer cases

Preferred has written to packagers and brokers to clarify its policy regarding which product range and criteria will apply to cases requiring re-offer after the October 5 cut-off date.This is in relation to its recent communication announcing new product launches on its core range from October 3 and its shared ownership range on October 10.It […]

NU shock move for £260m London sell-off

The £4.2bn Norwich Union property trust’s decision to put two flagship London office buildings on the market has surprised the City.NPT is marketing an office block at 10 Queen’s Street Place, which is yielding 5 per cent, for £180m and 16 Old Bailey, on a yield of 4.25 per cent, for £81m.The two sales comprise […]

Turning up the volume

In the words of Warren Buffett, it is often advantageous to ‘be fearful when others are greedy and greedy when others are fearful’. The last few months have been volatile for global equity markets and we have tried to play that to our advantage.

‘Same old story with new wealth label’

Thinc wealth management director Tim Parsons says many advisers are being taken in by the lure of a so-called shift in the way of doing business.He says: “The new wave of disenchantment is a sad but inevitable by-product of the shifting landscape within the retail advice sector as more firms hitch themselves to the bandwagon […]

Generation Rent

By Denise Wond, marketing manager We’ve heard a great deal about Generation Rent in recent years but what does it actually mean for consumers and advisers and has the face of the typical renter changed? The picture is certainly more diverse than it used to be. Homeownership is at its lowest point in 30 years, […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment