[globular-toast]

I heard about this supposed downside, but it makes no sense to me. For a start, when I applied for a mortgage I was asked for gross income. I guess they trusted me to figure out the rest. But the main thing is you can just stop doing the salary sacrifice at any time. It's not like you're locked in for any amount of time.

[MattPalmer1086]

Yeah, you can just stop salary sacrifice if you need the bigger effective income. Although many companies lock you in to it on a yearly basis, so you have to plan ahead a bit.

Your gross (pre tax) income is exactly what has been reduced too. So if you are sacrificing 10%, your gross is 10% lower too.

[globular-toast]

> Your gross (pre tax) income is exactly what has been reduced too. So if you are sacrificing 10%, your gross is 10% lower too.

But it's not reduced, though, is it? If someone who isn't the tax office asks for my gross revenue I'll tell them what the gross amount that goes into my assets is. They don't ask "what's your gross income for tax purposes?"

[MattPalmer1086]

Ah, I think you are correct, my mistake. However, some lenders will take salary sacrifice into account when doing affordability checks, and won't lend as much. I guess if they don't ask, there's no problem.

[globular-toast]

Yeah, they can ask whatever they like, I guess. I wasn't asked specifically about salary sacrifice, but they did do an affordability check and that might have included pension contribution. I also checked with my employer that I wasn't "locked in" to anything and they could change my contribution at any time.

It might be different if the sacrifice is for something that's basically essential for you like a company car. I could see that getting more scrutiny.