Employers are potentially losing out on £10 million of savings by not making use of salary sacrifice opportunities, according to B&CE Benefit Schemes.

The employee benefits provider said that two-thirds of employers are missing out on this money, and are unaware of savings opportunities this creates on national insurance (NI) contributions. Therefore, B&CE is urging companies to look at these arrangements to save both themselves and their staff money, and at the same time maintaining or improving pension provision.

When it comes to pensions, salary sacrifice has been in the news since the Budget, but B&CE says the arrangements mean the money sacrificed goes straight into their pension without tax or NI being deducted. This can represent a 30 per cent boost for basic rate tax payers.

"There has never been a more crucial time to find all sensible ways to reduce costs and a salary sacrifice arrangement is a useful way to save money while also allowing the opportunity to provide a valuable benefit for your workforce," explained John Jory, deputy chief executive officer at B&CE Benefit Schemes.

"It is surprising that only around one third of employers are taking advantage of this perfectly legitimate saving. In these turbulent times we are urging employers to make salary sacrifice one of the most common steps taken to save money in company pensions this year."

- Pensions Age May 2009

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