How much can I contribute?

You can contribute 3% or 4% of your Pensionable Earnings to your Retirement Account. This contribution is usually paid through Smart Pensions (see below). Your contribution rate doesn’t have to stay the same, and you can change it whenever you like – provided you stay within the Trustee’s imposed limits. To change your contributions, give one month’s notice in writing to your HR contact, and we’ll deal with the rest.

If you are thinking about changing your contributions, have a look at our member portal here It will show you the possible impact on your Retirement Account of increasing or decreasing your contributions.

Contributions continue until you leave the Scheme, retire, or reach age 75 – whichever comes first.

If you’ve been auto-enrolled in the Scheme, the Company will notify you of the initial contribution rate payable by both you and the Company, which will be compliant with the Government’s auto-enrolment requirements. You will be able to change this contribution rate at a later date, if you wish to do so.

How Much Will the Company Pay?

The Company doubles your contributions up to certain limits, as shown in the table:

Your contributions and the Company’s contributions are based on your Pensionable Earnings. Your Pensionable Earnings will be limited to the Earnings Cap, but everything invested in your Retirement Account will build up largely tax-free. You can find out more about the terms Pensionable Earnings and the Earnings Cap in the Glossary section.

Can I Make Additional Contributions?

If you want to make contributions above 4% of your Pensionable Earnings, you can do so. They will be classed as Additional Voluntary Contributions (AVCs) and will also receive tax relief. However, the Company won’t match these contributions. Also note that any AVCs will be deducted directly from your pay, and cannot be paid through Smart Pensions.

Continue reading...

You can make pension contributions of up to 100% of your earnings, but you will be liable to a tax charge if the total annual contributions paid to your pension exceed the Annual Allowance. This is currently set at £60,000 for most people, but may be lower if you are a very high earner (if you earn over £200,000 a year).

If you are subject to the Money Purchase Annual Allowance, the contributions that can be paid to the Baxi Pension Scheme by you and the Company on a tax efficient basis are limited to a much lower amount – currently £10,000 a year. You can find out more about the Annual Allowance and the Money Purchase Annual Allowance in the Glossary section.

You can start and stop paying AVCs at any time, taking a reasonable notice period into account.

You can also choose how your AVCs are invested. The investment options for AVCs are the same as your normal contributions, and you can invest them in any of the funds on offer as long as your at retirement target is not conflicted. For example you cannot invest in a cash targeting lifestyle strategy and the default investment option because these target cash and drawdown respectively.

If you leave the Scheme or die, your AVCs will be treated in the same way as your normal Scheme contributions.

Please contact the Pensions Administrator or your HR representative if you would like more information about AVCs, or would like to start paying AVCs. You can find contact details for the Pensions Administrator on the Contact Us page.


Most members make contributions through a salary sacrifice arrangement called Smart Pensions. This is a contractual agreement, which automatically reduces your salary by the amount of your normal contributions to the Scheme (excluding AVCs), and allows the Company to pay them to the Scheme on your behalf. This is a direct advantage to you because, by reducing your salary, you pay less National Insurance contributions. Ultimately, this means your total take-home pay should be higher. Smart Pensions will not affect your income tax position either, because all contributions are deducted from your pay before income tax.

Smart Pensions does not affect how the Company works out any salary increases or bonus calculations, nor any other benefits related to pay, because the Company bases these on your salary before salary sacrifice.

For the purposes of loan and mortgage applications, Baxi gives your ‘notional’ pay figure to lenders – this is your pay before salary sacrifice – meaning it will not impact this. Salary sacrifice is not right for everyone, please contact HR if you are unsure whether you should utilise this option.


Can I Opt Out?

You can withdraw from the Scheme at any time by giving your HR contact reasonable written notice. If you leave the Scheme, the higher life assurance cover provided to Scheme members will automatically lapse, even if you stay at Baxi. If you want to re-join the Scheme at a later date, you will usually need the Company’s consent and may also need to provide medical evidence. However, if you meet certain criteria set by the Government, you may be auto-enrolled again.

Contact us

Do you have a question about your Baxi Pension that this site hasn’t answered? If so, just email us or call us on the number provided.