Pensions can get very complicated, but if you just look at each piece separately it is possible to gain an understanding. One common question is regarding net, gross for tax and salary exchange schemes.
- A net scheme is deducted after tax and NI, the tax is then reclaimed at the basic rate by the pension company.
- A gross for tax scheme is deducted before tax but after NI.
- A salary exchange is a benefit resulting in a lower gross salary, so before both tax and NI.
No one scheme will suit every employee and every company and you will need to seek further advice when choosing a pension.