The government has confirmed changes to how pension salary-sacrifice will work from April 2029

​The government has confirmed changes to how pension salary-sacrifice will work from April 2029, and it’s something both employers and employees should have on their radar. The key update is a new cap: only the first £2,000 of salary sacrificed for pension contributions each year will remain exempt from National Insurance. Anything above that amount will start to attract NI for both parties.

For employers, this could mean higher payroll costs and the need to review existing sacrifice arrangements to keep everything compliant. Many businesses use salary sacrifice to support staff retention and offer a more tax-efficient reward package, so this shift may require some rethinking.

For employees, pension saving is still very much encouraged, but the NI “bonus” may shrink, especially for those who regularly contribute above the £2,000 threshold. It’s a good moment to check how your current scheme works and what this change might mean for your take-home pay in future.

👉 Read the full government update here:
https://heyor.ca/J2ubNk

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