Pension professionals urge rethink of salary sacrifice reforms – SPP

Nearly two-thirds of pension professionals want the government’s planned reforms to salary sacrifice pension arrangements scrapped, according to polling by the Society of Pension Professionals (SPP).

The findings come after the SPP hosted a webinar attended by more than 250 pension professionals to discuss changes that will limit the National Insurance contributions (NICs) exemption on salary sacrifice pension contributions to £2,000 a year from April 2029.

Following presentations from industry experts, attendees were asked for their views on the reforms.

Almost two-thirds (62%) said the proposals should be scrapped, while 24% supported implementing them in a different form.

Just 5% agreed the reforms should proceed as planned, and 9% said salary sacrifice for pension contributions should be abolished altogether.

Steve Hitchiner, SPP member and chair of the event, said: “This industry polling reveals strong support for rethinking these reforms, which is not a huge surprise given the changes will result in higher costs to employees – including over 850,000 basic rate taxpayers – and employers, along with less pension saving when more saving is needed.

“Salary sacrifice has long been an effective way of helping both employers and employees maximise pension contributions while reducing National Insurance costs.

“Restricting the NIC exemption from 2029 risks undermining those benefits and could discourage some employers from continuing to offer salary sacrifice arrangements altogether.”