Understanding the bonus waiver
To help you save more for your life after work, you can apply to waive a certain amount of your annual bonus in exchange for a contribution into the Uniper Pension Plan (UPP). This is called a bonus waiver.
You get income tax relief on the money you pay into your pension (up to certain limits), so a bonus waiver could be a tax-efficient way to boost your pension savings.
All active members of the Final Salary section of the Uniper Group of the ESPS can apply for bonus waiver.
However, bonus waiver only applies to your discretionary annual bonus, usually paid in April.
Importantly, you should consider whether you are likely to go over the Annual Allowance (AA) before you apply for a bonus waiver.
You can find more information about all of these points by selecting from the options below. You can also read more about pension tax limits and the Annual Allowance on the tax allowances page.
Each year you can choose to waive up to 100% of your discretionary annual bonus, in 10% increments. This amount is then paid directly into the Uniper Pension Plan (UPP) to boost your pension benefits.
The amount you choose to waive is taken from your salary before it is paid to you. You will not be able to access it again until you take your pension benefits. The earliest age you can usually do this is the Normal Minimum Pension Age (NMPA) which is currently age 55, increasing to age 57 from April 2028. However, some individuals may have specific circumstances which means their minimum age is lower. Please refer to your Member Guide for further information.
Any remaining bonus which is not waived will be paid to you via payroll and will be subject to income tax and National Insurance deductions.
Your bonus waiver will be kept separate from your ESPS benefits and your waived bonus must be paid into either:
The bonus waiver is paid via salary sacrifice meaning that it is paid into your UPP account before income tax and national insurance is deducted.
More information on salary sacrifice is available on the your benefits page.
If you want to make a bonus waiver, you will need to apply during the Benify benefit enrolment window in March.
For a salary sacrifice arrangement to operate, HMRC require you to apply for a bonus waiver before your bonus is paid, even though you may not know the exact amount of bonus you will get at this time.
It is important to think carefully about making a bonus waiver before you apply. Once you apply to make a bonus waiver you cannot change your mind.
The UPP is a Group Personal Pension Plan administered by Fidelity. The UPP account which your bonus waiver is paid into will be invested in the Future Wise default fund.
You can change your investment from the default option to self-select or vice versa after joining the UPP and at any point in the future by using Fidelity's secure online PlanViewer. You can also call the Fidelity Pensions Service Centre on 0800 3 68 68 68.
Please bear in mind that all investments can fall as well as rise in value, so you could get back less than you invest.
If you are a basic rate taxpayer the income tax savings could be worth 20% of your contribution.
For a higher rate taxpayer, it could be worth as much as 40%.
As the bonus waiver is paid via salary sacrifice, you will also benefit by saving National Insurance contributions.
Before you apply for a bonus waiver, you should think about whether this could cause you to go over the Annual Allowance (AA).
The AA is the most you can save tax-free towards all your pension arrangements in a single tax year.
If your pension savings go over the AA you may need to pay a tax charge.
You can learn more about the Annual Allowance (AA) on the tax allowances page.
Your bonus waiver is separate to any benefits you have in the ESPS but you must account for it in any Annual Allowance calculations. The Trustee, the Company and your pension administrator, Broadstone, cannot carry out any tax allowance calculations for you and your bonus waiver will not be included in any pension communications from Broadstone, such as Pension Savings Statements.
If your pension savings are not within the pension tax limits, you will incur a tax charge if you make a bonus waiver.
An Independent Financial Adviser (IFA) can offer you professional advice to help you make financial decisions.
You can also find support and guidance through the government-backed MoneyHelper service.
Visit the help and advice page for more details.
Neither Trustees, the pension administrator, Railpen, or Uniper can provide you with any financial or investment advice. They can give you factual information but not advice.