Contributions and tax

Paying into the Plan is not just about how much you contribute. When you join the bank you will be provided with details of how much the bank will contribute, and if those contributions will increase in the future. You will also get tax relief from the government on anything you pay in. All of this means that it’s easier than you think to build up your savings.

Salary sacrifice 

You can choose to give up part of your salary in return for an increased pension contribution from the bank. This means that your contribution is taken from your pay before tax, so you benefit from full tax relief straight away, and you save National Insurance too.  

Use our salary sacrifice calculator to see how you could benefit. 

The contributions paid by the Bank from your Value Account is by 'Salary Sacrifice.

If you don’t pay income tax because you’re on a low income, you can still get income tax relief on anything you pay up to 100% of your earnings each tax year, or £3,600 (gross) if this is more but this is not automatic.

Tax limits

When you’re thinking of how much to contribute, you should bear in mind that there is a limited amount you can pay without incurring a tax charge.

Generally, you can pay in the equivalent of your entire annual salary each year (or up to £3,600 if this is more) and get tax relief. However, the government has put in place an annual allowance which includes any money that you pay in and any money that an employer pays in on your behalf, to this plan or any other retirement savings you may have. If you exceed the annual allowance you will pay tax on any amount paid above it.

These allowances can change with each new tax year, depending on what the Government sets out. Our Tax Year Rates and Allowances booklet will keep you up to date on what these allowances are, and how they could affect you.

If you have already started to take your benefits you may be restricted to the Money Purchase Annual Allowance of £4,000 per annum.