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Changing Your SIPP Salary Sacrifice Deduction Amount

Your SIPP salary sacrifice arrangements are typically established at the beginning of your employment with SmartWork. However, we understand that life circumstances can change, and we’re here to help you navigate the process when adjustments are necessary.

Understanding HMRC Regulations

HMRC maintains strict guidelines regarding salary sacrifice modifications to preserve the integrity and fairness of pension contributions and associated tax benefits. Changes to existing salary sacrifice agreements are generally only permitted when driven by significant life events or circumstances.

For detailed information about these regulations, you can refer to the official HMRC guidance.

Qualifying Circumstances for Changes

SmartWork can process modifications to your pension deductions when they result from substantial life changes, including:

Personal Life Events:

  • Marriage or divorce proceedings
  • Birth or adoption of a child
  • Serious illness or disability (affecting you or a dependent)

Financial and Employment Changes:

  • Adjustments to your hourly rate
  • Significant shifts in personal financial circumstances, such as:
    • Relocating or purchasing a home
    • Changes in credit commitments
    • New tax year or updated HMRC tax/NI rates
    • Career transitions, retirement, or workplace changes
    • Modifications to working patterns or hours

Smart Tip:

If you need flexibility for bank holidays and annual leave, consider selecting a percentage-based deduction that automatically adjusts with your weekly or monthly income. Our team can provide personalised advice to help you choose the most suitable option.

How to Request Changes

All modification requests must be submitted through our Variation Form, which you can find here:  SIPP Change Request Form

Our specialised Pensions Team will review each request to ensure the circumstances qualify as significant personal changes under HMRC guidelines. Only qualifying requests will be processed.

Processing Timeline and Next Steps

Processing Time: Please allow 5 working days from submission for our Pensions Team to review and implement your requested changes.

IFA Notification: If you work with an Independent Financial Advisor, remember to inform them of any upcoming changes to your pension arrangements.

Implementation: Approved changes will take effect in your next available payroll cycle and will be reflected in future remittance statements.

Important Information About Percentage Deductions

When selecting percentage-based deductions, SmartWork applies calculations to your available income after minimum wage requirements have been satisfied, rather than to your gross contract income.

Our team can easily calculate the equivalent percentage needed to achieve your desired contribution amount. Simply contact us for personalised guidance on determining the right percentage for your goals.

Pre-Change Review

Considering a modification, but want to see the financial impact first? Contact your SmartWork business manager to request a detailed pay projection showing your new pension amount before making your final decision.

Additional Information

Further information can be found at https://www.gov.uk/tax-on-your-private-pension/annual-allowance, or alternatively, be sure to seek independent advice from a financial advisor should you need it.