Most companies offer some form of pension, usually a 'defined contribution' scheme. Employers offering the latter scheme will contribute money to your pension on your behalf. For example your company could offer a defined contribution scheme to which it will match employees' contributions up to 5% of their salaries. If you earn £25k and pay 5% into your pension, this company will contribute the same, which, when you take into account basic rate tax relief means that your pension pot will be boosted by £2,500. So by failing to pay into your pension you would effectively be turning down up to £1,250 of free money from your boss. What's more, higher rate taxpayers can gain even more, as they can claim another 18% tax relief back through their tax return.
UK life expectancy is currently around 80 for men and 84 for women, but increasing by 2.5 years on average every decade. You could be in for a very long retirement, so your financial position is going to be critical. Consider making additional contributions to your pension. The Government offers tax relief of 22p in every 78p invested (up to a personal maximum of £215,000 per year). A high rate tax payer can claim a further 18p back. Furthermore, as your pension fund will grow exponentially, the benefits of such a tax-efficient action multiply.
Negotiate Your Salary
The best and easiest time to negotiate a better pay and benefits deal is when you go for a new job. Remember that an extra £1,000 per annum is extra every year.
Make The Most Of Your Lunch Break
If you work 48 weeks a year and have one hour a day for lunch, it adds up to 240 hours of spare time. If you normally work an 8-hour day, then your lunch breaks add up to the equivalent of 30 working days (a whole month) in which to do something worthwhile. Browse this site for a ton of stuff that you could do to make a little extra money or get to work on slashing your expenses in that time.
Golden Handshakes
Up to £30,000 can be paid to an employee tax free if it is compensation for the loss of your employment. Negociate well...
Cycles
Cyclescheme is an independent company created to help both employers and employees make the most of the Green Transport Plan Initiative and associated tax concessions offered by the Chancellor. The scheme allows employers to loan cycles and cycling safety equipment to employees as a tax-free benefit. It is a salary sacrifice that benefits from income tax and NI relief. The scheme is available to UK tax payers who pay PAYE. Please note that the self-employed cannot take part in the scheme. If your employer does not currently offer this, tell them to sign up on the site. For a bicycle costing £600 together with various accessories including a cycle helmet, top-of-the range lock, waterproof jacket and some lights, the annual tax saving would be around £260.
Childcare Vouchers
Ask your employer to sign up to the childcare voucher scheme, if they haven't already. This way you'll get your childcare tax and national insurance free, as long as your child or children are at approved providers.
Free Computer Loans
Computer equipment worth up to £2,500 can be loaned to an employee without that employee paying any tax on the benefit-in-kind.
Mobile Phones
The provision of a free phone by an employer to an employee is now not taxable. As this relieves the employer of a considerable amount of admin trying to add up how much has been paid for private calls versus business calls for each employee every year, encourage your employer to provide them.
Insurance
If your employer offers insurance as part of its benefits package, it can often be worth signing up. As companies tend to negotiate deals for large numbers of people, the premiums offered will often be much lower than you'll be able to find elsewhere, and some will even offer cover for your family, too. Many companies offer their employees free life assurance, typically worth around three or four times your annual salary. Another type of insurance often offered by employers is critical illness cover. This pays out a tax free lump sum in the event of you suffering from a serious illness, or if you have to undergo certain types of surgery. A number of companies offer income protection insurance for free, or at a reduced cost. Unlike critical illness, this will pay out if you are unable to work and premiums can be quite expensive, so you could save a fair bit compared to taking out a policy yourself. Medical health insurance is often available as a taxable benefit which can save a fortune, when compared to the cost of taking out the cover yourself.
Suggestion Schemes
Awards by employers to employees for suggestion schemes are tax-free, so if there is no Ideas programme in your company, suggest one!
Share Incentive Plans
Share schemes available to employees enable shares in the employer company to be transferred to them tax free. If your company is listed and on the up, then take advantage.
Which Career?
Take the Jung Typolology personality test here for free, and see what your dominant personality types are. Then click on the Jung Career indicator link to see what careers fit with your personality.