Yep, there is. If the employee gives up some / all of their bonus in exchange for a pension payment from their employer, they avoid paying tax (and NI) on the bit they’ve given up which is helpful… the downside of the pensions is sadly you do pay tax on your pension fund money when draw it out in the future just like it is earnings… but often you pay lower rates of tax in retirement than you do when you’re working as you earn less…
The key is to understand that the way we are taxed in bands, means that there are some levels of earnings that are very inefficient. For instance – for every £ you earn above £100,000 and below £123,000 you are being taxed at 60%… so there are situations where you would be much better to put any earnings in this bracket into a pension scheme … to save this extortionate tax rate – and draw the money at a later time, when your tax rate will likely be lower…