How will accessing a salary sacrifice scheme affect my entitlement to a State Pension?

An employee’s entitlement to a Basic State Pension is not affected by the salary sacrifice scheme, but their entitlement to a State Second Pension may be.

If an employee earns between the annual LEL (£4,108) and £11,600 they will be deemed to have earned £11,600 for the purpose of calculating their State Second Pension accrual. However, entitlement to the State Second Pension will be affected if an individual’s earnings fall below the LEL and may be affected if the reduced earnings fall between £11,600 and the Upper Earnings Limit (which for the tax year 2004/2005 was £31,720).