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Salary Sacrifice Reforms

The 2025 Autumn Budget introduced a cap on the amount which individuals could save into their pensions via salary sacrifice without paying national insurance in respect of those contributions. The cap, amounting to £2000 per tax year, comes into effect in April 2029 so there is plenty of time for individuals to review how the change might impact their pension savings.

However, a survey carried out on behalf of Pensions UK reveals that just 41% of all pension savers were aware of the reforms; although this rose to 63% of those already using salary sacrifice for their pension contributions. Within the latter group the understanding of the likely impact of changes is mixed with just 62% expecting to pay increased levels of national insurance. Interestingly 42% of this group commented that as a result of the proposed salary sacrifice changes, they intend to look more towards other savings vehicles including ISAs and bonds as well as increasing debt and mortgage payments.

If you are looking for advice on pensions or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.