How salary sacrifice schemes changes in Rachel Reeves’ Budget will affect you
Rachel Reeves to change pension salary sacrifice schemes — what you need to know
- Rachel Reeves has announced that the Government will cap the amount of money people can contribute to private pensions via salary sacrifice before it incurs tax.
- The new limit for tax-free contributions through a salary sacrifice scheme will be set at £2,000.
- Any contributions exceeding this £2,000 cap will be subject to National Insurance contributions.
- This policy change is scheduled to take effect from 2029 and the measure is estimated to raise £4.7 billion in 2029/30 and £2.6 billion in 2030/31.
- Employers may offer salary sacrifice as part of their pension scheme as a tax efficient way to help workers boost their pots.