The Lemon Fool

My spouse has the option of taking his bonus payment as an employer pension contribution. Is there any tax advantage to doing this?
Currently, he receives a non contributory employer pension contribution into his company scheme, and makes additional payments into a SIPP, where the charges are lower and the choice of investments better. We will put the same amount into the pension irrespective of whether the bonus goes into the occupational pension or his SIPP.
I wondered whether there might be less NI to pay if the bonus goes straight to the SIPP? Also will get higher rate tax relief at source, but I don’t think this makes any difference overall as the tax relief will eventually get back to us.

Pros:
You (the employee) don't pay employees national insurance on the contribution.
Your employer doesn't pay employers NI on the contribution (=13.8%), and they may be willing to apply an uplift to the contribution. (for example: "We'll go halves on the saved NI").

Cons:
You may have less control over where the contribution gets invested.
You may not be able to transfer the contribution to wherever you want it to go to whilst you are still employed.
Any NI benefit now may be outstripped by being locked into higher charges in the longer term. (this assumes that your scheme has lower charges than the employer's scheme)

Personally, I would take the NI hit (for a HR taxpayer it will only be 2%), and have the money in my hand to use now/pay down mortgage/invest in more accessible schemes than a pension.

PochiSoldi

Thanks. No possibility of getting a slice of the employers NI unfortunately.
Just the 2% uplift, which might be cancelled out pretty quickly by the charges. The other considerations don’t matter since this wouldn’t change how much in total gets paid into pensions.