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...

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