Aviva is launching a salary exchange calculator for advisers. Available on the Aviva for Advisers website, the calculator helps advisers demonstrate the benefits of salary exchange to clients.
Salary exchange – also known as salary sacrifice – involves employees trading part of their salary or bonus in exchange for a pension contribution from their employer. Employees and employers pay lower income tax and National Insurance contributions and many employers re-direct National Insurance (NI) contributions into their employees’ pensions to boost retirement savings.
With National Insurance contributions increasing in April 2010 (and again in 2011), salary exchange is becoming increasingly popular with both employers and advisers.
Features include:
– Comprehensive input fields that make it easy to capture information reflecting a variety of client circumstances.
– Before and after scenarios highlight the benefits for employees and employers.
– Tool to illustrate effect of passing employer saving to employees (0–100%).
– Production of letters for employees agreeing to salary exchange.
– Production of personalised reports explaining how each member is affected by salary exchange.
Paul Goodwin, head of pensions at Aviva, said: “Aviva understands how difficult it can be to put away enough money to enjoy a comfortable retirement and salary exchange can help employees potentially invest more into a pension, afford to retire sooner and achieve a higher tax-free cash lump sum.
“Salary exchange is a tax-efficient way of maximising contributions into pension plans and with increases in National Insurance, it has become a major feature where an adviser can add value for his client. Aviva’s salary exchange calculator and support material can help the adviser demonstrate the benefits of salary exchange and set-up strategies for employers, and we believe that Aviva’s new tool is the clearest and most user-friendly in the market.”
Source : Aviva Press Release
