Salary sacrifice: NI-free cap from 2029 confirmed

The cap is law, not a plan. The National Insurance Contributions (Employer Pensions Contributions) Act 2026 received Royal Assent on 29 April 2026, so the 28 October Budget is a checkpoint on this rather than the decision — the decision has already been taken. What it does, from 6 April 2029: only the first £2,000 a year you sacrifice into a pension keeps its National Insurance exemption. On today’s rates that caps the saving at around £160 a year for an employee paying 8% and around £300 for an employer paying 15%. Sacrifice more than £2,000 and both of you pay National Insurance on the excess at your usual rates. Income tax relief on the contributions does not change, and neither does the annual allowance. Nothing changes before 6 April 2029 either — salary sacrifice works in full until then, which is two and a half years away. We will check this against the Budget documents on 28 October and mark it if anything moves.

Salary sacrifice: from 6 April 2029 only the first £2,000 a year sacrificed into a pension keeps its National Insurance exemption (legislated at the November 2025 Budget). Above that, the employee pays NI at their usual rate on the excess and the employer pays theirs. Income tax relief on the contributions doesn't change.