Overview
- From April 2029, only the first £2,000 of pension contributions made via salary sacrifice will qualify for National Insurance relief.
- Income tax relief on pension contributions remains unchanged under the reform.
- Employees contributing above £2,000 will lose NI savings on the excess and employers will incur higher NI costs on those amounts.
- Providers and advisers urge a three‑year planning window to model impacts, update payroll and pension structures, and brief staff.
- Higher earners and those making additional voluntary contributions are expected to be most affected, though salary sacrifice continues to offer value up to the cap.