Sacrifice salary into your pension and skip the tax and the National Insurance. See what it really costs you and the NI saving a normal pension misses.
When you sacrifice £S of salary, you'd have paid income tax and National Insurance on it so your take-home only falls by what's left after that. The full £S (plus any employer NI they add) goes into your pension.
The edge over a normal pension is the National Insurance: a personal pension or SIPP gets income tax relief but not NI relief. Salary sacrifice saves employee NI too, 8% up to £50,270 and 2% above (2026/27) and your employer saves 15% employer NI, which they may add to your pot.
Sources: gov.uk & HMRC (income tax, NI, 2026/27). Illustrative; assumes a standard tax code and that sacrifice stays above minimum wage. From April 2029 the NI saving on pension salary sacrifice is due to be capped at £2,000/yr.
Illustrative only, not financial or tax advice. Assumes a standard personal allowance and tax code, salary as your only income, and that the sacrifice keeps pay above the minimum wage. A lower salary can affect mortgages, statutory pay and some benefits; pension money is locked until age 55 (57 from 2028). Always check with your employer or a qualified adviser.
Pairs with the Take-Home Pay calculator.