{"id":896620,"date":"2026-04-15T22:22:17","date_gmt":"2026-04-15T22:22:17","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/896620\/"},"modified":"2026-04-15T22:22:17","modified_gmt":"2026-04-15T22:22:17","slug":"rachel-reeves-pension-tax-raids-pushing-firms-to-scrap-salary-sacrifice-schemes-entirely","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/896620\/","title":{"rendered":"Rachel Reeves pension tax raids pushing firms to scrap salary sacrifice schemes entirely"},"content":{"rendered":"

Nearly four in 10 private sector employers are planning to scrap pension schemes that involve salary sacrifice following Rachel Reeves\u2019s decision to introduce a \u00a32,000 cap on national insurance relief, according to new research.<\/p>\n

The study by Standard Life, which surveyed 500 private companies in February, found 39 per cent are preparing to withdraw the schemes entirely.<\/p>\n

A further one in ten firms offering salary sacrifice have already decided to remove the benefit.<\/p>\n

The findings highlight concerns about retirement savings in the UK as employers respond to the policy change.<\/p>\n

Salary sacrifice allows employees to divert part of their salary into a pension, reducing the amount of income subject to tax and national insurance.<\/p>\n

Employers also benefit through lower national insurance contributions when staff participate in the arrangements.<\/p>\n

However, the Chancellor announced pension contributions eligible for national insurance savings will be capped at \u00a32,000 per year.<\/p>\n

The measure is due to take effect from April 2029 and is expected to raise \u00a34.7billion in its first year.<\/p>\n

\"Reeves\"\/<\/p>\n

Four in ten firms may scrap pension schemes in response to Chancellor’s tax ploy<\/p>\n

| <\/p>\n

GETTY<\/p>\n

Workers currently pay national insurance at eight per cent on earnings between \u00a312,570 and \u00a350,270, with a rate of two per cent applied above that threshold.<\/p>\n

Employers pay national insurance at 15 per cent on salaries above \u00a35,000, following an increase from 13.8 per cent in April last year.<\/p>\n

Standard Life analysis suggests employees and businesses will face higher costs once the cap is introduced.<\/p>\n

An employee earning \u00a350,000 and contributing five per cent of their salary through salary sacrifice would see their national insurance bill rise by \u00a340 per year.<\/p>\n

\"Pensioner\"\/What do the reforms mean for your pension? | GETTY<\/p>\n

Their employer would face an additional \u00a375 in costs.<\/p>\n

A worker earning \u00a375,000 with the same contribution rate would pay around \u00a335 more annually.<\/p>\n

However, their employer would see a larger increase of \u00a3263 in national insurance costs.<\/p>\n

Many employees use salary sacrifice arrangements to manage tax thresholds, including the \u00a3100,000 level at which personal allowances begin to reduce.<\/p>\n

Catherine Foot, director at Standard Life, said: “The UK has a widespread under-saving problem. Minimum workplace pension auto-enrolment levels are insufficient, with 15 million people heading for financial insecurity in retirement.”<\/p>\n

She added: “Our analysis finds that a lower earner is most likely to be affected not directly but indirectly by the knock-on consequences that this has for businesses, while middle and high earners will have the double whammy of extra costs themselves and the effects of higher payroll costs for their employer.”<\/p>\n","protected":false},"excerpt":{"rendered":"Nearly four in 10 private sector employers are planning to scrap pension schemes that involve salary sacrifice following…\n","protected":false},"author":2,"featured_media":896621,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,1700,474,528,1232,617,2499,285,619,1200,16,3106,15],"class_list":{"0":"post-896620","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-economy","10":"tag-finance","11":"tag-labour-party","12":"tag-money","13":"tag-pensions","14":"tag-personal-finance","15":"tag-politics","16":"tag-rachel-reeves","17":"tag-tax","18":"tag-uk","19":"tag-uk-politics","20":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116411062445913563","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/896620","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=896620"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/896620\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/896621"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=896620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=896620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=896620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}