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How much should you be saving?

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Things to consider when contributing into your pension plan

  • What's the current value of your workplace pension pot?
  • Do you have any other personal pensions?
  • What are your current outgoings and when may these change?

Are you on track with your savings goals?

Check you are on track with your savings goals with the AEGON target funding calculator

Tax efficiency

When you pay in to a pension you will get tax relief. How your contributions are deducted from your salary will determine how this tax relief is added to your pension.

The different methods of making contributions to your pension plan are detailed below. The default method is Salary Sacrifice.

Salary sacrifice

Salary sacrifice is the term that Her Majesty’s Revenue & Customs (HMRC) describes as a contractual arrangement whereby an employee gives up the right to receive part of their cash remuneration, usually in return for their employer’s agreement to provide some form of non-cash benefit. Salary sacrifice can be known as Smart Pay, Salary Exchange and Salary Conversion. Throughout this website we will refer to the term “Salary Sacrifice”.

Your salary (before any tax or national insurance is deducted) will be reduced by the amount equivalent to your pension contribution. Baillie Gifford will then pay that amount direct to AEGON. This gives you tax relief at your highest rate immediately and also saves the National Insurance you would otherwise pay on the amount you contribute.

You will also receive an additional contribution directly to your pension from the National Insurance savings that Baillie Gifford makes. This is 10% of your gross personal contribution.

Use our salary sacrifice calculator to see the tax savings you could make

Relief at source

Your earnings will have Income Tax and National Insurance deducted from them, leaving you with what is commonly known as your take home pay or net pay. Your contribution is then deducted from your take home pay.

When this contribution is paid to AEGON, they will add basic rate tax to your contribution. AEGON will then reclaim basic rate tax from HMRC.

If you are a higher or additional rate tax payer then you must reclaim the rest of your tax relief from HMRC.


Some things you might want to consider:

  • Paying contributions by salary sacrifice represents a change in your employment Terms & Conditions
  • Your salary must not go below the National Minimum Wage/National Living Wage. If this were the case your contribution would be made using relief at source
  • If you’re a non-taxpayer then you will not receive any tax relief via salary sacrifice so would miss out on the Government tax relief payable to your pension
  • Any student loan repayments will be calculated on your reduced taxable salary
  • Paying by salary sacrifice should not affect your “reference pay” which is used for pay rises, bonuses and other benefits
  • If you receive state benefits now, or in the future, then using salary sacrifice can affect your entitlement if it brings your earnings below the Lower Earnings Limit
  • Those benefits that may be affected are:
    • Contribution based benefits such as incapacity benefit and the State Pension
    • Earnings related benefits such as maternity allowance or the State Pension
    • And, work related benefits such as Statutory Sick Pay, Tax Credits, or statutory maternity or paternity pay
    • For more information we recommend you contact your local tax office

How much can you save?

When contributing into your pension plan, there are some government set limits for tax relief purposes that you will need to be aware of.

Annual Allowance

This is the maximum amount of pension savings you can make each year that will benefit from tax relief. The Annual Allowance for 2021/2022 is £40,000.

This limit includes all payments whoever makes them (so includes Baillie Gifford payments).


Tapered Annual Allowance

If your income, including Baillie Gifford pension contributions, is over £240,000, your Annual Allowance may potentially be reduced by £1 for every £2 you earn over £240,000.



Money Purchase Annual Allowance

This is a lower annual allowance for those individuals who have flexibly accessed pension since April 2015. The allowance is currently £4,000 for 2021/2022.


Lifetime Allowance

This is set at £1,073,100 for the 2021/2022 tax year. If your benefits exceed this at a ‘crystallisation event’ then you will have to pay a tax charge on any benefits above this level.



Exceeding the Annual Allowance

You will be subject to a tax charge if you or Baillie Gifford, in total, pay in more than the Annual Allowance during the tax year to all registered pension schemes including the Plan. The charge will be added to the rest of your taxable income for the tax year in question. In some circumstances a tax charge for exceeding the Annual Allowance may be paid from your pension fund.

If you think that you may be getting close to your Annual Allowance, or may have exceeded it, you may wish to consider taking advice from an independent financial adviser.


What if you have applied for protection of your Lifetime Allowance?

If you have applied for Pension Protection with HMRC, you may still be auto-enrolled into the Plan as described above, unless you complete the opt out process. You can also ask your employer to exclude you from being auto-enrolled if you have applied for Pension Protection, but you may be asked for evidence. It is your responsibility to understand the implications of being auto-enrolled into the Plan. Receiving contributions to the plan may mean that you lose your protection. You should seek financial advice if you have applied for Pension Protection.


Find out more about the allowances and limits shown above

Consolidating previous plans

If you have previous plans and wish to consider bringing these into the Baillie Gifford Group Retirement Plan, Johnson Fleming can help with your decision making.

Johnson Fleming can offer a service to help you consolidate your existing pension arrangements.

To find out more about the service then you can contact the transfers team on or visit

Alternatively, you may wish to contact your own Financial Adviser.

You can also contact AEGON directly. If you wish to consolidate, and are comfortable managing your own pension transfer, you can login to your pension plan with AEGON and start the process.

Frequently asked questions

See the summary of the company pension plan for further details on when you can change your contribution levels. Please note by changing your contributions this may affect the level of the contribution from Baillie Gifford and there may be a minimum level of contributions you will need to make to remain a member of the Baillie Gifford Group Retirement Plan.

Once your final pension contribution has been paid to your policy (no later than the 22nd of the month following your final pay period), AEGON will supply you with a leavers pack which will set out the options for you. Your options would be:

Continue to make contributions
Your policy under the Plan is owned by you and any funds in it. The Plan is very flexible and portable, and as such, you can usually continue contributing, and possibly even get your new employer to make contributions into it. Please contact AEGON if you wish to find out more information about this option.

Leave your fund invested with no further contributions
Contributions already invested continue to participate in the investment performance of your chosen funds. The fund will stay invested until such time as you decide to take your pension. You can choose to restart contributions at any time providing you are eligible to do so.

Transfer your Plan
If you’ve more than one pension fund you may want to consolidate all of your pensions into one pension plan. Please contact AEGON if you wish to find out more information about this option.

Yes, additional payments can be made, please contact HR.

Use The Pension Tracing Service; find their full details in our contacts section.

This will be dependent on the type of pension plan you are looking to transfer but can take up to six months, but it normally happens much more quickly.

It can be possible to transfer your pension savings from a registered UK pension scheme to an overseas pension scheme. However, if the scheme receiving the transfer isn't a recognised overseas pension scheme (ROPS), the transfer could be subject to tax charges.

The requirements to be a recognised overseas pension scheme (ROPS) changed from 6 April 2017 and so you should check that the scheme you’re transferring to on or after that date meets the new requirements.

HM Revenue and Customs (HMRC) produce a list of ROPS at However, HMRC won’t guarantee that any transfers to a scheme on the list will be free of UK tax. It’s your responsibility to find out if you have to pay tax on any transfer of pension savings as HMRC will usually pursue any UK tax charges arising from transfers to overseas entities that don’t meet the ROPS requirements (even when they appear on this list). This includes where the ROPS requirements have changed and where taxpayers are overseas. HMRC will also charge penalties in appropriate cases.

Accessing pension benefits (directly or indirectly) before the age of 55 will result in a liability to UK tax charges in all but the most exceptional circumstances.

Johnson Fleming is not able to provide any advice in this area. You should consider seeking independent advice for overseas transfers.

Transfers to QROPS that are made after 9th March 2017 may attract a tax charge of 25%. You should take specialist advice to understand your position before considering a transfer.

Click here for further information from HMRC on transferring your pension abroad.

You will need to refer to HR who will confirm Baillie Gifford’s policy in relation to your pension contributions during maternity or unpaid leave. Contact HR should this situation arise.