Salary sacrifice schemes are likely to increase in popularity following increases to National Insurance, according to Standard Life.
However, the firm says higher earners should consider their options carefully, as they may fall foul of new restrictions to pension tax relief.
Salary sacrifice schemes allow employees to save on National Insurance contributions by having their employer place part of their annual salary directly into a pension fund.
The increase in NI means employees can save an additional 1% by using the schemes, and they are likely to become more popular from 2011 onwards.
Andrew Tully, senior pensions policy manager at Standard Life, says: "Putting in place a salary or bonus sacrifice arrangement is likely to prove a popular option for many people.
"Sacrificing salary or bonus to reduce National Insurance can be part of an effective tax planning strategy. However, the associated changes to higher rate pensions tax relief means those people with incomes of £130,000 and over may not find salary sacrifice in exchange for an employer pension contribution an attractive option."
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