Overview
- From April 2029, only the first £2,000 of salary‑sacrificed pension contributions will be exempt from NI, with amounts above treated as ordinary contributions for employees and employers.
- HMRC guidance indicates 7.7 million employees use salary sacrifice, about 3.3 million contribute above the cap, and the average extra cost is estimated at £84 a year.
- Government analysis shows workers aged 31 to 50 are disproportionately likely to be affected by the new limit.
- Around 290,000 employers are expected to face higher NI bills plus one‑off implementation costs such as software updates and staff training.
- The OBR forecasts about £4.7bn in additional revenue in 2029/30 from the measure, easing to roughly £2.6bn the following year, as industry figures warn saving incentives may weaken.