When are you going fully electric?
- Thread starter Ricochet J
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Found this which may be of use to anyone taking a car on the NHS salary sacrifice scheme.
There is a nice spreadsheet you can download (bit.ly/TGSSFreeTool) and put it some details and it will tell you how much your pension will decrease by. Fairly hefty amount imo
There is a nice spreadsheet you can download (bit.ly/TGSSFreeTool) and put it some details and it will tell you how much your pension will decrease by. Fairly hefty amount imo
Yeh I totally get for some people it’s worth it, particularly if you are a high earner.
You really don’t need to earn a whole lot to start bouncing off the lifetime cap because of how it’s calculated for a defined benefit pension. The cap also hasn’t moved in 5 years which is a huge problem. Pretty much every NHS doctor is set to hit it during their career, even if they never make it to being a consultant.
What worries me is how many people with fairly modest incomes are engaging with it and don’t fully understand it.
What makes it worse is those people may have ordinary leased a fiesta but instead are getting Polestar/Tesla/iPace because the ‘net cost’ isn’t that far off leasing a Fiesta. In reality they are decimating their pension without realising.
I can see it being PPI all over again…
Yes, basically. Apart from the last point, it’s not that hard to calculate.
Those that are in those schemes should really take the time to understand how they actually work and they are nowhere near as complex as a private scheme. It’s literally their post retirement livelihood.
I disagree. To get the equivalent annuity out of a private pension, you’d need to be paying in significantly more than the pension saving off your payslip. At that point you might as well not bother.
I’m getting slightly off topic, sorry!
This is interesting from a purely academic perspective (being a nerd, but not having a salary sacrifice scheme or a defined benefit pension scheme available to me 
)
What's the interaction with the lifetime allowance? Are some people going to be better off having the car if their pension contributions were going to go over the allowance anyway?
)What's the interaction with the lifetime allowance? Are some people going to be better off having the car if their pension contributions were going to go over the allowance anyway?
It’s my understanding that the way to determine if you have hit the lifetime allowance is very different for a defined benefit pension, mainly because you don’t have a pension pot. I think it’s calculated as 20 times your first years pension plus any lump sum. Where as for a normal pension it’s essentially the pension pot.
If you hit the lifetime allowance (circa £1m or a £50k defined benefit pension, assuming no lump sum), you get taxed, a lot.
Edit see:
www.gov.uk
If you hit the lifetime allowance (circa £1m or a £50k defined benefit pension, assuming no lump sum), you get taxed, a lot.
Edit see:
Tax on your private pension contributions
Tax you pay and tax relief you get on contributions to your private pension - annual allowance, lifetime allowance, apply for individual protection
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Found this which may be of use to anyone taking a car on the NHS salary sacrifice scheme.
There is a nice spreadsheet you can download (bit.ly/TGSSFreeTool) and put it some details and it will tell you how much your pension will decrease by. Fairly hefty amount imo
I've seen that before and it massively exaggerates pension age and life expectancy. For example it states a Doctor "typically" retires at 60 and dies at 88, so goes on to assume you will lose out on 28 years of your reduced payments.
For many the reality is most people (myself included) are not on the final salary pension, will retire at 67 and live until about 82 according to the current UK life expectancy. So with me being 54 (51 when I first used the scheme) plugging in some realistic numbers, the total loss pension comes in at £17,533 if I live until 82. Or about £91 per month loss of pension. That is of course assuming I keep using the salaray sacrifice scheme until I retire. Yet over the same assumed period of 16 years leasing, I will have saved over £200 per month, or over £38k.
Of course it also assume car prices will stay static. By all means it impacts your salary and it will not be beneficial to everyone, but that spreadsheet you linked to makes a lot of very exaggerated assumptions.
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It's a perfectly good place to post this stuff because a lot of people get EVs through salary sacrifice due to the low BIK. So they need to know it is not always a great idea.
I agree on the point about the people on lower wages who typically buy a used car thinking salary sacrifice allows them to drive a fancy new car for the same money. Had a colleague who thought about getting an ID3 back when they were still cheapish. It was going to cost her about £280 per month and her woman maths worked out that her used Focus was costing her about £250 per month in depreciation, repairs, insurance etc. So she would get a new EV that costs less to run and would be cheaper overall.
I pointed out the potential for her to lose many thousands on her pension and she gave up on the idea.
My wife hit her lifetime allowance several years ago and has been talking to accountants and pension specialists ever since it seems. She now doesn't pay into the scheme at all (NHS) except a peppercorn amount per annum. I have no idea how it works or what is happening, I just suggest what cars we might get next (EV for her PHEV for me at present - waiting for 7 seat EV - Kia EV9 big possibility).It’s my understanding that the way to determine if you have hit the lifetime allowance is very different for a defined benefit pension, mainly because you don’t have a pension pot. I think it’s calculated as 20 times your first years pension plus any lump sum. Where as for a normal pension it’s essentially the pension pot.
If you hit the lifetime allowance (circa £1m or a £50k defined benefit pension, assuming no lump sum), you get taxed, a lot.
Edit see:
Tax on your private pension contributions
Tax you pay and tax relief you get on contributions to your private pension - annual allowance, lifetime allowance, apply for individual protection
Soldato
You tease
I'll set expectations now. There's probably better, but I don't careYou tease
What did you order?Ordered my first full EV today. Should be arriving April time. Heart over head this one, but feel like it's the right choice for my needs.
Are any manufacturers offering a guarantee with penalty clauses for late car delivery - chinese economy/Taiwan or winter energy cuts for european manufacturers could have a lot of influence.
NHS (public services) car deals seem to be continually attractive, their pensions are payed directly via state/tax-payer I thought, so reduced actuarial/fund-management overhead, maybe they want to reduce future tax-payer liability.
NHS (public services) car deals seem to be continually attractive, their pensions are payed directly via state/tax-payer I thought, so reduced actuarial/fund-management overhead, maybe they want to reduce future tax-payer liability.
Soldato
No
Why would they offer that? All car manufacturers are struggling to produce vehicles with backed up order lists.
Anyone got any opinions on the new BMW iX1?
Got an email from BMW so went to the configurator and it looks quite nice, with some interesting colour options, etc. and the drivetrains seem rather potent.
Happened to see one today and the grille is rather in-your-face and it looks bigger than I thought it'd be but looked smart.
Got an email from BMW so went to the configurator and it looks quite nice, with some interesting colour options, etc. and the drivetrains seem rather potent.
Happened to see one today and the grille is rather in-your-face and it looks bigger than I thought it'd be but looked smart.
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