Make your Nestlé pension
work for you.

What does it cost?

Whichever section you're in, you receive tax relief on your contributions so the actual cost to you is less than the contributions you make.

Nestlé takes your pension contributions from your pay before they take any income tax away. This is known as the ‘net pay arrangement’. This means that you get the tax relief on all your contributions, including any Additional Voluntary Contributions, directly in your pay. Information on tax relief and pension contributions can be found here: www.gov.uk/tax-on-your-private-pension/pension-tax-relief

After you’ve been a member of the Fund for one month (or two years if you joined Nestlé before 1 July 2016), you can also make National Insurance savings by making contributions through salary sacrifice, which means it will cost even less to save for your retirement. This will happen from the 1st of the month following one month’s (or two years’) membership in the Fund.

For example:

Your contribution

£20

You earn £24,000 (£2,000 a month) and contribute 1%
to DC Start:

After tax relief

Your contribution

£20

=

Cost to you

£14

Tax relief

£4

National Insurance saving

£2

Increasing your benefits

If you’re in DC Core you have the option to pay Additional Voluntary Contributions (AVCs). AVCs are contributions that you can make on top of your main contributions to provide additional benefits at retirement.

AVCs are particularly useful if you are thinking of retiring early or if you wish to make up for times when you were not building up pension. Nestlé doesn’t pay anything towards your AVCs.

As they are paid into DC Core, AVCs build up on a Defined Contribution (DC) basis. See DC benefits for information about how DC Core works.

Remember, if you’re already building up main pension in DC Core, you should pay the maximum DC Core contribution of 8% before considering paying AVCs, as Nestlé will contribute 1.5 times your DC Core contributions up to a maximum of 12% (8% employee contribution).

Salary Sacrifice

Unless you choose to opt out in advance, you will automatically be entered into a salary sacrifice arrangement after you have been a member of the Fund for one month, or two years, depending on when you joined Nestlé.

Salary sacrifice is a tax efficient way of making contributions to your pension savings. It is an arrangement between you and Nestlé where you agree to a reduction in your salary and in return you receive a benefit. In this case the benefit is a contribution to your pension. All contributions to the Fund (including any Additional Voluntary Contributions (AVCs)) automatically receive tax relief. But with salary sacrifice, you can save on National Insurance (NI) contributions as well. It works like this:

  • You stop making pension contributions and agree to reduce your gross monthly pay by the value of those contributions (including AVCs)
  • In return, Nestlé pays an equivalent amount directly to your account on your behalf
  • This is in addition to the employer contributions that Nestlé make to your account
  • You save on both tax and NI contributions as your taxable income is reduced by the amount you agree to give up
  • Nestlé also saves on NI contributions as your pay is lower.

Salary sacrifice is not currently available to employees of Galderma and Osem.