Seventy-three per cent of companies do not offer pension salary sacrifice, and are therefore missing out on the significant cost savings that these programmes can generate, says Mercer.

The financial consultant has conducted a web briefing amongst 200 participants, revealing that many offer salary sacrifice through childcare vouchers, but only 27 per cent take advantage of pension sacrifice. Over half, however, said they plan to implement this type of programme in the next 12 months.

Stephen Hempenstall, a senior associate at Mercer's employee benefits business, said: "Companies are increasingly looking to their benefit programmes for cost savings and are realising that pension salary sacrifice can generate significant savings for both employers and employees.

"With future reduction in state second pension accrual and increases in national insurance (NI) contributions, pension salary sacrifice will become more attractive to both the employees and the employer. Recent payroll system advances and the availability of streamlined delivery services mean salary sacrifice is no longer the reserve of larger organisations. Organisations with only 150-200 employees are still likely to achieve a return on investment within the first 12 months of implementation."

Mercer has calculated that a pension scheme with 500 members and an average salary of £30,000, with an average contribution of five per cent, the total potential company NI saving is around £100,000 a year.

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