26 November 2025
If you are covering the introduction of a cap on National Insurance relief for pension salary sacrifice, please see the following comment from Jon Greer, head of retirement of policy at Quilter:
"Introducing a £2,000 cap on National Insurance relief for pension salary sacrifice from 2029 is a deeply misguided move. At a time when the Government acknowledges that tomorrow’s pensioners risk being poorer than today’s, policy should be focused on incentivising saving and not dismantling one of the most effective tools we have.
"Salary sacrifice has long been a cornerstone of workplace pension strategies, helping millions boost contributions and plan with confidence. Restricting it will inevitably lead to cutbacks. A survey of 267 of our customers in October found one in four (25%) said they would stop using salary sacrifice if tax benefits were reduced or removed, while nearly one in five (19%) said they would contribute less. That is a devastating prospect when we’re already sleepwalking into a retirement crisis. What the smorgasbord approach fails to recognise is that small tweaks can have huge behavioural impacts – and this one could harm millions of future retirements.
"Employers will also feel the pain. After last year’s increase in employer National Insurance contributions, this represents a double whammy, removing flexibility to support staff saving and stretching reward budgets even further.
"That’s significant sums stripped from pay packets and business budgets, funds that could otherwise be invested in long-term financial security."
