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The Chancellor\u2019s threat of a a two per cent national insurance tax on salary sacrifice contributions above \u00a32,000 is deeply unfair, says Martin Kimber<\/p>\n
People tend to look at me like I\u2019ve just admitted to collecting antique Victorian dolls when I tell them I sacrifice 15 per cent of my salary into a pension.<\/p>\n
However, my friends have recently become accustomed to my quirky obsession, and are no longer surprised when I go yet another year without a foreign holiday, so as to save more for retirement.\u00a0<\/p>\n
I do this for several reasons.\u00a0<\/p>\n
Firstly, artificially lowering my gross pay reduces my overall tax bill: someone my age or younger, earning around \u00a340,000 a year, will immediately save 37p on every pound in levies. That\u2019s a hefty, instant return on investment.\u00a0<\/p>\n
That\u2019s after avoiding paying income tax, national insurance and student loan repayments.\u00a0<\/p>\n
I was born in June 1994, meaning my year group was the first to be caught out by Nick Clegg\u2019s heart-felt, ironclad promise not to raise tuition fees.<\/p>\n
Secondly, the state pension is becoming increasingly unsustainable. Without some form of means-testing, the treasury will eventually become a Ponzi scheme retirement fund with a state attached.\u00a0<\/p>\n
So it\u2019s unlikely I\u2019ll ever see free government benefits in my old age \u2013 and why should I?<\/p>\n
Saving for retirement is moral<\/p>\n
Saving for my own retirement is the moral thing to do. Why burden the already over-stretched taxpayer when I\u2019m perfectly capable of saving for my own retirement?\u00a0<\/p>\n
That\u2019s why the kite the government flew last week, signalling a two per cent national insurance tax on salary sacrifice contributions above \u00a32,000<\/a>, had me frothing at the mouth.\u00a0<\/p>\n Legally hiding a pot of money from the government is the most effective and egalitarian way for the lower, middle and upper-middle classes to build wealth for themselves and their children.<\/p>\n A healthy private pension also acts as \u201cF*** you money\u201d, a phrase recently popularised by personal finance influencers. Should I be fed up with work in 30 years\u2019 time, for whatever reason, I want to be able to say \u201cF*** you\u201d and walk away.\u00a0<\/p>\n \t\t\t\t\tRead more<\/p>\n