Paying into a pension is a really tax-efficient way of saving for your future. Because contributions are taken from your salary before you're taxed, it only costs you £80 to save £100 into your pension if you pay tax at the basic rate.

However, you can save even more by making contributions through salary sacrifice.

Here's how it works:

• You stop making pension contributions and instead, Nestlé pays your contributions (including AVCs) directly into your pension account on your behalf
• In return, you agree to reduce your monthly pay by the value of your pension contributions
• Nestlé also makes the same employer contributions to your pension account as well
• As your pay is reduced by the amount of your pension contributions, you make national insurance savings as well as tax savings
• Nestlé also makes national insurance savings as your pay is lower.

How this affects your other salary-related benefits

So that your other salary-related benefits aren’t affected if you make your pension contributions using salary sacrifice, we keep a note of your salary before it is reduced by the value of your pension contributions. This is known as your ‘reference salary’.

Your reference salary is used to calculate all salary-related employment benefits such as pay increases, bonuses, holiday pay, life assurance, sick pay, maternity pay and overtime.

This means that none of these benefits will be affected if you make contributions by salary sacrifice.

How to make contributions through salary sacrifice

Unless you tell us otherwise, you will automatically make pension contributions through salary sacrifice once you’ve been a member of the Fund for one month.

Salary sacrifice isn't right for everyone

If you receive tax credits, you earn less than the national living wage or you receive state benefits, please take some time to read What should I consider? to make sure that salary sacrifice is right for you. If you don’t want to make your pension contributions by salary sacrifice, you can opt out – see What if....

If you are working and being paid overseas, you cannot currently make contributions through salary sacrifice.