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3.3m pension savers facing hit with salary sacrifice changes
Around 3.3 million UK pension savers will lose national insurance relief on contributions over £2,000 from April 2029, with employers also facing increased reporting and payment duties.
- Last week HM Revenue and Customs confirmed that changes will treat salary-sacrifice pension contributions above £2,000 as subject to NI from April 2029, impacting around 3.3 million savers.
- Government analysis shows around 7.7 million employees use salary sacrifice, with forgone national insurance relief rising markedly from £2.8 billion in tax year 2016 to 2017.
- About 290,000 employers must update payroll systems and report class 1 NI, with estimated implementation cost 1.9 million, according to HMRC.
- Some workers may stop using salary sacrifice, and affected employees could pay an average additional tax bill of £84 per year, HMRC says.
- Workers aged 31 to 50 are most likely to be affected, with male employees overrepresented while current treatment excludes income tax or NI on salary‑sacrificed pension contributions.
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3.3m pension savers facing hit with salary sacrifice changes
HMRC said an estimated 7.7 million employees currently use salary sacrifice to make pension contributions.
·London, United Kingdom
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Millions of pension savers set to be hit by salary sacrifice overhaul
Millions of UK pension savers are set to be hit by salary sacrifice changes unveiled in the Budget, according to new figures. According to figures published by HM Revenue and Customs (HMRC), an estimated 7.7m employees use salary sacrifice to make pension contributions. This means employees effectively take a pay cut in exchange for higher pension contributions, reducing total income and tax bills, dragging them back under the £100,000 threshold…
·London, United Kingdom
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Total News Sources12
Leaning Left2Leaning Right1Center6Last UpdatedBias Distribution67% Center
Bias Distribution
- 67% of the sources are Center
67% Center
L 22%
C 67%
11%
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