Overview
- From April 2029, salary‑sacrificed pension contributions above £2,000 a year will lose their national insurance exemption and be treated as standard employee contributions.
- A December Yonder survey for Pensions UK found 28% plan to boost contributions before the change, 43% expect no change, 3% plan to cut before, and about 11% expect to reduce once it takes effect.
- Pensions UK says awareness of the reform is low and warns confusion could weaken saving habits and dampen employer contributions above the minimum.
- The Association of British Insurers cautions that both employers and employees are likely to save less, risking smaller retirement pots and added payroll complexity.
- The Treasury defends the policy, citing projected salary‑sacrifice costs rising to £8 billion and saying 95% of workers earning under £30,000 who use salary sacrifice are protected, with employer reliefs unchanged.