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Salary Exchange for Pension Contributions
How does it work?
- You stop making your normal pension contributions from your net pay.
- Your gross contractual pay decreases by the amount you were paying as a pension contribution.
- You make savings in tax and NICs on the amount of salary exchanged and this will then increase your take home pay.
- We will then pay the same amount of contributions on your behalf.
- Using this method, you do not need to make a separate claim for higher rate tax relief if you are a higher rate tax payer
- The term 'Reference Salary' will be used to describe your salary before the salary exchange reduction, to ensure you are not disadvantaged by this scheme. Your Reference Salary will be used to calculate your pension contributions, your pension benefits, Life Assurance and any other salary-related employee benefits. It will also be used for any future salary reviews and bonuses that are calculated on a percentage of your salary. Your Reference Salary will also be provided for any mortgage or tenancy references.
If you are a member of the Group Personal Pension Plan, you will automatically be opted into the Salary Exchange scheme for pension only unless you advise otherwise.
You can find further information on Salary Exchange by clicking here and examples of the potential savings by clicking here.
To join the new GPP, login to the BenPal system through the 'Login' tab on this site, and follow the instructions in the pension section.