Once a way to save money on a bike to work, the scheme is now a ‘life hack’ to lessen a tax bill or to qualify for free childcare
No, it’s not a delayed April fool: putting in a request to have your wages cut may actually result in you being better-off at the end of the month.
Salary sacrifice, sometimes known as salary exchange, is a great, if counterintuitive, “life hack”, according to Alice Guy, the head of pensions and savings at the investment platform interactive investor.
It has long been associated with initiatives such as the government’s cycle-to-work scheme, where you give up some of your earnings in exchange for a heavily discounted bike for your commute.
But with hundreds of thousands more people being dragged into higher tax brackets from this month, financial experts are highlighting it as a way of bringing down your personal tax bill, too.
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