Fidante Benefits Package

Will I still benefit from income tax relief on my pension contributions with Salary Exchange contributions?

Salary Exchange contributions are paid as employer contributions. You do not receive tax relief on employer contributions. However, you do not pay income tax on employer contributions either, so the result is the same.

What are the tax implications for higher-rate taxpayers?

With conventional Personal contributions, in order to obtain the full amount of higher-rate tax relief (the difference between the basic rate and higher-rate of tax) on your contributions, you are required to complete a tax return or to submit a claim direct to HMRC.

With Salary Exchange contributions, you are not required to do this as you will immediately receive the full amount of tax relief due via your payroll.

Please note that if your tax code has previously been adjusted to credit higher rate tax relief linked to conventional Pension contributions, you should contact HMRC to advise that personal contributions are to stop.

Will making payments using Salary Exchange represent a change to my terms and conditions?

Yes. This is because your contractual pay is reduced by an equivalent amount to the Pension Contributions you wish to exchange. You will not pay any personal contributions into the Pension Scheme. However, Fidante will provide you with a benefit of additional pension contributions into the Pension Scheme. You will not be liable for National Insurance or Income Tax on this benefit.

Will other salary related benefits be based on my reduced pay following Salary Exchange?

The benefits you receive as part of your package will be unaffected. However, the way they are calculated may change. Benefits which are non-pensionable such as Group Death in Service and discretionary bonuses will continue to be based on your pre-Salary Exchange pay. Your pre-Salary Exchange pay will also continue to be used to calculate any pay increases.

To avoid a ‘double counting’ effect, items which are pensionable such as maternity, paternity, and adoption leave will be based on your post Salary Exchange salary.

Will my State Pension benefits be reduced if I make Salary Exchange contributions?

Since April 2016 the State Pension has been calculated on a single, flat rate basis for all. Consequently, Salary Exchange should have no impact for anyone using this process.

24