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Pensions salary sacrifice changes from 2029

The Government has passed the National Insurance Contributions (Employer Pensions Contributions) Act 2026, introducing an annual cap on National Insurance (NI) relief for pensions salary sacrifice.

The change takes effect on 6 April 2029 and will limit tax-advantaged pension salary sacrifice to the first £2,000 of sacrificed pay each year. Contributions above that threshold will still receive income tax relief but will be subject to employee and employer National Insurance.

 

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