Pension Salary Sacrifice Changes Explained

<p>From 6 April 2029 the government will cap the National Insurance saving on salary sacrifice pension contributions. The first £2,000 a year stays free of National Insurance, and everything above that will be taxed like ordinary pay. The CIPP puts 3.3 million workers in scope.</p><p>Edmund Greaves and Chris Tuite explain what salary sacrifice is, why middle earners gain more from it than high earners do, and what the cap actually changes. National Insurance falls from 8% to 2% above the higher-rate threshold, which is why someone earning £28,000 saves proportionally more than someone on £80,000.</p><p>They also work through the drawbacks of carrying a lower gross salary, from mortgage affordability and maternity pay to income protection and redundancy, and answer whether any of it affects your state pension.</p><p>Nothing changes until April 2029. Check your payslip to find out whether you are already on salary sacrifice, and talk to HR or payroll if you are not sure.</p><p><strong>Chapters</strong></p><p>00:00 The perk in your payslip that&#39;s about to be taxed</p><p>00:48 What we cover in this episode</p><p>01:28 The law has already passed</p><p>02:33 Why the £100,000 threshold matters so much</p><p>04:24 Fiscal drag is pulling more people in</p><p>05:26 How salary sacrifice actually works</p><p>07:02 Why the highest earners gain the least</p><p>08:06 The numbers at £28,000, £50,000 and £80,000</p><p>10:14 The catches: mortgages, maternity pay and cover</p><p>14:08 What changes in April 2029</p><p>15:19 The cliff edges at £60,000 and £100,000</p><p>17:15 What to do before 2029</p><p>19:44 Chris&#39;s verdict and the name problem</p><p>20:56 Over to you</p>