Many workplace pensions use ‘Salary Sacrifice' (sometimes called ‘Salary Exchange’, ‘Salary Conversion’ or ‘SMART’). It’s one of the most tax-efficient ways to pay into a pension.
In short, it means you give up (or ‘sacrifice’) some of your monthly earnings and your employer puts it towards something else - in this case, your pension.
The money goes straight into your pension before any deductions for Income Tax and National Insurance. This means you save both tax and National Insurance on your contributions so they could cost less than you think.
So you get tax relief, even at the higher rates, at source.
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