Band Earnings

Also known as Qualifying Earnings, this is your pay between £​6,032 and £46,​350 a year. In other words, your pension contributions are not based on your full salary, but on that part of your salary above a minimum amount – £​6,​032 (for 201​8/1​9 tax year), up to a maximum limit of £4​​6,​350 (201​​8/19).

Employer contributions

Your employer pays 2% of Band Earnings until 201​​9, when their contribution rate will increase to ​3%.

There’s more information about the contribution rates in the Building a Nest Egg booklet.

Tax relief

Tax relief on your contributions means that for every £100 you want to save, you only pay £80. Tax relief of £20 is then added by HM Revenue & Customs (HMRC), topping your contribution up to £100. If you are a higher-rate taxpayer you may be able to claim additional tax relief.

​Smart

Your contributions are automatically paid through SMART. This is a way of making pension contributions that means you (and your employer) pay lower National Insurance (NI) contributions.

There are some people who won’t benefit from paying pension contributions through SMART; we will take them out of SMART and they will pay contributions using traditional payroll deduction.

You can find out more about contributions and SMART in the Building a Nest Egg booklet, or take look at our Q&A section to see some common questions about SMART.