Salary Sacrifice Options: Still Worth It — Even with 2029 Changes

The Government has confirmed that from April 2029, only the first £2,000 of pension contributions made through Salary Sacrifice will qualify for National Insurance savings. While this is a significant policy shift, the core message remains clear:

Salary Sacrifice is still very much worth it.

For most employees, the £2,000 allowance still provides meaningful tax and NI efficiency. Employers also continue to benefit from reduced NI costs, making Salary Sacrifice a valuable part of a competitive benefits package. And importantly, contributions above the cap will still receive tax relief — they just won’t attract additional NI savings.

With over three years before the change takes effect, now is an ideal time for employers to review their arrangements. The political landscape may also shift — the next UK General Election is expected in 2029, meaning future policy changes are possible.

What should employers do now?

• Review your current Salary Sacrifice setup
• Communicate clearly with employees
• Model the impact of the upcoming changes
• Plan ahead, knowing things could still evolve

To see the full analysis; including examples, employer savings and next steps, read our full Salary Sacrifice Update here.