Salary sacrifice (Salary exchange)


'Salary Exchange' is a way of lowering the cost of your National Insurance Contributions. Under Salary Exchange, Telefónica makes contributions to your Pension on your behalf, and your salary is reduced by a corresponding amount. This means you don’t pay National Insurance on the amount that is contributed to your Pension.


Saving with salary exchange

How much you save depends on your earnings and which section of the Telefónica UK Pension Plan you belong to. Here’s an illustration of what you can save under salary exchange.


Salary % of salary saved
£0 - £7,956 Nil
£7,956 - £41,860 12%
£41,860 and above 2%


These savings mount up over time, which is why salary exchange has become very popular.


Our default option is to enrol all members under salary sacrifice. To check your Pension statement and to view your options please visit Telefónica Rewards.


If salary exchange doesn’t benefit you you can opt-out by changing your preferences on Telefónica Rewards.


More questions answered

Why is it called salary exchange?

It’s called salary exchange because although Telefónica pays the pension contributions on your behalf, you literally have to give up, i.e. exchange, that much of your salary in return.


Why is salary exchange the default?

If it looks like you would broadly benefit from salary exchange (based on advice from independent experts), to make things easier for you, your enrolment page on the Telefónica Rewards website is pre-populated with salary exchange arrangements. But it’s your responsibility to make the right choice and to understand what you are signing up to. So you have the option to select or unselect salary exchange depending on what you choose.


What happens if I'm auto-enrolled?

We'll default you to pay your contributions by salary exchange unless it means your pay goes below the National Minimum Wage.