Salary sacrifice cuts in the Budget include a cap on pension benefits, which some have dubbed a 'stealth tax rise in Employer National Insurance'.

This means National Insurance will be charged on salary-sacrificed pension contributions above an annual £2,000 threshold from April 2029, raising £4.7 billion, the Office for Budget Responsibility said.

But the move has been criticized by businesses, who rely on salary sacrifice to

If the government really cares about getting rid of tax distortions in the pension system and raising revenue, it shouldn’t abolish salary sacrifice for pensions. It should:

1. Merge income tax and employee national insurance so pensions are taxed at the same rate as wages,…

— Joe Seddon (@whatjoedid) November 15, 2025

Nick Burns, CEO of Reward Gateway of Eden

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