Salary exchange for housing associations

Setting up a salary exchange arrangement can bring substantial benefits

Salary exchange (or salary sacrifice) makes the payment of pension contributions more efficient for both employers and employees, by reducing the amount of National Insurance (NI) contributions payable.

Employees agree to a reduction in salary equal to their pension contributions, and in return the employer makes an additional contribution to the scheme equal to the salary given up.

NI contributions are based on overall earnings, so a lower salary produces NI savings for both employer and employee.

The contribution paid to the pension scheme remains unchanged, but the employee benefits from higher take-home pay and the employer pays less NI.

Some employers use a proportion of their NI saving to enhance benefits for employees, resulting in improved benefits for staff.

How can First Actuarial help?

Our housing pension specialists can help you by:

  • Explaining how salary exchange may benefit you, quantifying the likely savings
  • Reviewing contractual benefits to maintain a ‘reference salary’ that will leave benefits unchanged
  • Supporting the implementation of your salary sacrifice arrangement
  • Delivering staff presentations to explain the benefits of using salary exchange, including potential savings, impact on state benefits, maternity pay and student loans, and what happens if a member leaves the scheme.

Why choose First Actuarial?

First Actuarial has a number of specialist consultants in housing pensions. We know the benefit structures involved in housing associations, and can quickly model cost savings.

Our work with other housing associations means we can alert you to any actions other employers in the sector are taking.

We have a highly experienced Financial Wellbeing team that can explain issues simply and clearly.

We offer good value for money and fixed fees so you plan your costs in advance.

Get in touch

Get in touch with one of our housing experts to discuss how we can help you.

First Actuarial are very approachable. They’re good at helping managers and Board members digest a very difficult area, and they’ve also been proactive in helping us shape an innovative solution.

- Paul Richmond, Group Director of Finance and Resources, Watford Community Housing

First Actuarial case studies

Aster Group

Housing association Aster Group extended its financial wellbeing programme and brought in First Actuarial to deliver a bespoke Retirement Planner, with supporting webinars and one-to-one sessions.

"People love the one-to-ones and are grateful for them. It’s a valuable offering that would otherwise cost them hundreds of pounds. People recognise it as a real benefit."


Royal Mail

The Communication Workers Union (CWU) enlisted the help of First Actuarial when Royal Mail proposed replacing its Defined Benefit pension fund with individual Defined Contribution arrangements.

“I can’t speak highly enough about First Actuarial – their people have been brilliant. The journey has been inspirational, nothing but a positive experience.”


Cheam School

With substantial increases in Teachers’ Pension Scheme (TPS) contributions looming for independent schools, Cheam School looked to First Actuarial for specialist support.

“We had a very good experience working with First Actuarial. I felt that they were always on the end of the phone, available to help and respond to issues as they arose."

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