Salary sacrifice changes to see 2.8 million cut back pension saving

According to Freedom of Information request to HMRC

Sophia Panayi
clock • 2 min read

More than 2.8 million workers are expected to cut back on pension saving once new restrictions on salary sacrifice come into force in 2029, according to a Freedom of Information (FOI) request to HMRC by LCP Partner Steve Webb.

Additionally, the FOI revealed that this includes 666,000 individuals who earn less than the upper earnings limit of £50,270 a year, with this tranche generally expected to represent basic rate taxpayers. The Office for Budget Responsibility (OBR) previously estimated that it is lower earners who will reduce their contributions by the most in its paper Costing of charging NICs on salary-sacrificed pension contributions. The government announced plans to apply a £2,000 cap to the amount of employee pension contribution which can be paid through ‘salary sacrifice' whilst avoiding employ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Pensions

PCLS after age 75: Addressing a common misconception

PCLS after age 75: Addressing a common misconception

Pension legislation does not impose an upper age limit on the payment of PCLS

Caitlin Southall
clock 14 August 2026 • 4 min read
The AI ship has sailed and pension providers are still sitting on the shore

The AI ship has sailed and pension providers are still sitting on the shore

'The AI interface has arrived'

Jonathan Lister Parsons
clock 13 August 2026 • 6 min read
Pensions minister Torsten Bell: 'Together, we are going to finish the job'

Pensions minister Torsten Bell: 'Together, we are going to finish the job'

Bell was reappointed to the pensions minister role in the government reshuffle

Holly Roach
clock 27 July 2026 • 1 min read