Salary exchange - a better way to save

Salary exchange gives you an ideal opportunity to add value to your clients and increase your remuneration. It's an easy, efficient way to improve an employer's benefits package.

It can also provide you with a powerful opportunity to drive home the importance and increased value of the work-based pension scheme alternatives to the National Employment Savings Trust (NEST).

Salary exchange may not be suitable for everyone. We recommend your clients get professional advice if they need more information on salary exchange.

What is salary exchange?

It's an arrangement where employees agree to give up some salary or bonus. The amount given up is used by the employer to provide a non-cash benefit to the employee.

As the employee is being paid less gross salary the employer makes National Insurance Contribution (NIC) savings and the employee pays less tax and NICs.

Salary exchange calculator

Use our handy tool to work out the savings and produce individual employee statements.

Find out more

The benefits

  • Employers save on their NIC bill
  • Employees save on tax and NICs
  • Reinvesting these savings in a pension plan may give employees a bigger retirement fund
  • This gives you an ideal opportunity to add value to your clients and increase your potential remuneration

How we can help?

Useful links

Further information?

If you have a question that we haven't covered, you can email us and we'll do our best to find out the answer and let you know. We may also update our Questions and Answers.

You can also contact your usual Royal London representative for further information.

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.