As if evidence were needed that our current benefit system is not fit for purpose: http://forums.moneysavingexpert.com/showthread.php?t=3655837
Basically, there's a chap who earns £65k and faces losing his child benefit. He asks if it's possible to use salary sacrifice to commit enough of his salary to pension so that he won't lose the benefits, and wonders what happens if he goes further.
Based on the responses and what I know of the matter, if he were to put £50k a year into his pension (plus another ~£2k into childcare vouchers) he'd be assessed for benefits as if his income were just over £12k - meaning he'd get all sorts of benefits. He reckons he'd go from an income of £3300 per month (after paying for childcare vouchers and nearly £4k a year into his pension) to about £3100 per month thanks to all the benefits he could claim. He'd lose £200 per month, but would have an extra £46k in his pension pot per year (nearly £4k per month).
Sounds like a good deal? So the benefit state is really good for people with incomes of £65k or so...
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