Salary sacrifice values for SIPPs should be agreed at the start of your employment, but there are some instances where you can change the value.
HMRC does not usually allow changes to salary sacrifice agreements during employment unless the change is a result of 'life-altering' circumstances. This restriction is in place to ensure the integrity, fairness and consistency of pension contributions and tax benefits.
You can read more about this via HMRC here.
This means that you can only change the value of pre-agreed pension deductions in special circumstances. Examples of such circumstances include:
- Marriage or divorce
- Birth or adoption of a child
- Serious illness or disability affecting you or a dependent
- Significant changes in your financial circumstances. Examples of this might be:
- Change in hourly rate
- Change in circumstances such as moving house / buying a home / increased credit
- New financial year / tax or NI rate changes from HMRC
- Retiring / leaving a job / changing rates or workplace
- A change to your working pattern or working hours
💡 If you wish to update in line with bank holidays and annual leave, it would be best for you to consider a PERCENTAGE deduction, that fluctuates in line with your weekly / monthly income. We can advise on this if you are unsure. 💡
If you wish to make changes to your salary sacrifice agreement, from 6th April 2024 our Change of Details/Amounts Form will require you to provide a reason for the change. These reasons will be reviewed by our Pensions Team and changes actioned only if the reasons for the change are considered a significant change in your personal circumstances.
Kindly allow 5 working days from the date of your submission for our Pensions Team to update the requested details. If you use an IFA , you may need to get in touch with them to inform them that there will be a change. Any change will be reflected in your next available payroll, and shown on future remittances.
Note: If you are opting for a percentage deduction, we may need to run some calculations first to get the exact percentage you want. When applying a percentage, we have to apply this to the income available AFTER minimum wage has been calculated, so this is not done on the gross contract income.
We can easily work out the equivalent percentage if you have an idea of the value you want, so just get in touch if you need guidance on working this out.
If you would like to receive a pay projection with your new pension amount before you decide whether to change it please email our friendly team at sales@nasagroup.co.uk.