Why Salary Sacrifice Works for Me: A Case Study

Mike, 29, says that the salary sacrifice scheme that his employer offers has helped him take control of his finance and make some sensible choices.

“I’ve never been very good at money and when I went away to university I managed to get myself into a lot of debt. Unlike my more sensible friends I used to spend above my means and not wait until I had the money before I bought something. This meant that I racked up a lot of interest charges and ended up in a bit of a pickle with credit cards and overdrafts.

“When I left university and got a job I was determined that I was going to be much better with my money. However there are so many things that you need to pay out for in a new city and new job that I still wasn’t sure how to manage my money even though I was going to be earning a good income in my new job.”

Discovering Salary Sacrifice

“I had taken a job with a big law firm in the city and was very excited about being paid a good salary but knew nothing about employee benefits. In our induction week we were taught about all the extra benefits that we were entitled to and how we could use them. As well as the ones you have head of such as a pension scheme and healthcare, we were told about salary sacrifice.”

As soon as Mike heard about the concept he knew that he could use it to his advantage and it could help him with big expenses.

“It made perfect sense to me as I was just about to pay out a big chunk of money for a yearly tube pass. It was cheaper overall to do it that way but I didn’t have the spare cash available for such a big expense at that time. My company would pay for it though and then take it out my monthly pay cheques in a kind of interest free loan.”

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Managing Money

“I have done the same thing every year since and now I have moved out of London I have also used the scheme to pay for my rail pass for the year. For me it made perfect sense and has allowed me to manage big expenses over a period of time. The fact that it comes straight out my pay before I receive it means that I don’t miss the money and am just used to it.

“I am trying hard to manage my finances better and have been helped by not incurring new interest charges and knowing what my budget will be each month. The other employee benefits that my company offers have been very good but for me, although you are not technically getting anything extra, the salary sacrifice scheme has been the most useful. Picking a company with a good employee benefits scheme is not always at the forefront of young people’s minds but it is amazing how much it can help you.”

The Next Step