Contributions and tax
You can choose to save from a minimum of 4% of your pensionable pay every 4 weeks.
Tesco will match how much you save up to 7.5%.
| You pay | Tesco pays | Total |
|---|---|---|
| 4% | 4% | 8% |
| 5% | 5% | 10% |
| 6% | 6% | 12% |
| 7% | 7% | 14% |
| 7.5% | 7.5% | 15% |
| More than 7.5% | 7.5% | More than 15% |
If you want to save more than 7.5% of your pensionable pay you can do that too, but the Tesco match will be limited to 7.5% of your pay.
For more information please refer to your guide to the Tesco Retirement Savings Plan or Our Tesco.
What is pensionable pay?
Generally, pensionable pay is all earnings apart from bonuses. Colleagues may receive some special payments, for example car payments, which are not included in the pay for calculating contributions.
SMART
Contributions that you make into the Plan will automatically be through ‘SMART’ (sometimes called salary sacrifice or salary exchange). Under SMART, you choose to give up part of your salary in return for an increased contribution from Tesco. 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.
For more information on ‘SMART’ please refer to the SMART guide and the SMART video below. Use our salary sacrifice calculator to see how you could benefit.
Autumn budget 2025
The Government have recently announced that from April 2029, National Insurance savings on SMART (salary sacrifice) pension contributions will be capped. This means you’ll only get NI savings on the first £2,000 of your pension contributions through salary sacrifice each tax year. Contributions above this amount will still benefit from tax relief but will no longer save you NI. Most colleagues won’t be affected, but higher earners or those paying in more may see a change. We’ll keep you updated as the changes get closer.
Relief at source
Should you decide to opt out of SMART, or not be eligible, contributions that you pay will be deducted from your salary after tax and passed on to Legal & General, along with any additional amount that Tesco is paying in for you.
Legal & General will claim basic rate tax relief automatically on your behalf. If you are a higher-rate tax payer you’ll need to claim the additional amount through your tax return.
If you don’t pay income tax because your earnings are below the income tax threshold, Legal & General can still claim basic rate tax relief for you and add it to your retirement savings account.
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 pension plans 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. The Tax Year Rates and Allowances guide will keep you up to date on what these allowances are, and how they could affect you.
