Pension sacrifice optimiser

What salary sacrifice actually does in 2026/27

Salary sacrifice sounds like an accountancy chore. Used well, it's the cheapest pension money in Britain. You agree with your employer to reduce your contractual pay, and the difference goes straight into your pension instead. Sacrificed pay never reaches you, so it never meets income tax or employee National Insurance, and it lowers the figure HMRC uses for two expensive tests: the £60,000 Child Benefit charge and the £100,000 personal allowance taper.

Both tests run on "adjusted net income", broadly your pay minus pension contributions. Bring the measured number under the threshold and the charge simply never arises. Gift Aid does the same job from a different pocket: HMRC counts the grossed-up donation, so £80 given to charity takes £100 off adjusted net income. The optimiser's job is to find the smallest sacrifice that gets you there and then tell you what it honestly costs after all the tax that falls away.

Worked example: £65,000 with two children

Child Benefit for two children pays £2,337 a year in 2026/27. On a £65,000 salary the High Income Child Benefit Charge takes £584 of it back. Now sacrifice £5,000. Adjusted income lands exactly on £60,000, the charge vanishes, and £5,000 goes into your pension. The dent in your take-home? £2,900. The other £2,100 is income tax and NI you no longer pay, and the £584 of Child Benefit stays in the family on top. You have spent £2,900 and received £5,584 of pension and benefit for it.

The bands where it works hardest

With children, the £60,000 to £80,000 band is prime territory: tax, NI and benefit clawback stack to a marginal rate around 54% for a two-child family, so sacrificed pounds are nearly half price. Between £100,000 and £125,140 the taper pushes the stack to 62%, and a sacrifice that holds you under £100,000 also protects Tax-Free Childcare and free hours. Even a basic-rate earner gets £100 of pension for £72 of net pay. There is no band where the machine works against you.

The small print

Sacrifice changes your contract, and your official salary falls with it. That can trim mortgage multiples, life cover worked as a salary multiple, and pay-linked benefits such as maternity pay. You cannot sacrifice below the minimum wage, your employer has to offer the scheme, and pension money is locked away until 55, rising to 57 in 2028. None of that stops most people; it just belongs in the decision. The calculator flags your trap bands automatically, and the bonus calculator runs the same logic for one-off payments.