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Salary sacrifice to be taxed

560 replies

SomethingInTheAirToday · 08/11/2025 19:02

https://x.com/politlcsuk/status/1986914552093745592?s=46

not only are my generation not going to have a state pension or private healthcare, but we also can’t save into our own pensions because we need to fund the current generation.

this makes me so angry

Politics UK (@PolitlcsUK) on X

🚨 NEW: Rachel Reeves will use the Budget to impose a £2k-a-year limit on how much salary can go into a pension before paying National Insurance The move will raise £2bn and hit salary sacrifice schemes [@thetimes]

https://x.com/politlcsuk/status/1986914552093745592?s=46

OP posts:
Thread gallery
7
nearlylovemyusername · 08/11/2025 22:07

zzplea · 08/11/2025 21:22

Using salary sacrifice for pension payments avoids paying National Insurance on it. The biggest beneficiary is the employer as they pay less Employer NI contribution. The employee saves a bit too.

Are people confusing salary sacrifice with the income tax relief on pension contributions? There are no plans to scrap that.

No confusion here.
This will still be a significant hit to higher earners, esp those trying to avoid 100k trap.

BUT - remember everyone was happy when RR increased employers' NIC? no tax increases for working people they said. Look at job market now.

With this NI tax employers will be reviewing headcount even tighter and will def reduce their pension matching schemes.
Slow clap Labor, no one can bit their incompetence.

lazyarse123 · 08/11/2025 22:03

Boohoo76 · 08/11/2025 21:46

You are right that they are on half of the living wage BUT most of them don’t have mortgages/rent, childcare and travel costs. For a two bed terrace in my area, a full time childcare place and a train pass to London, that would require £4.5k per month after tax for just those three items. That “living” wage does go very far…

I'm a pensioner. I downsized from a house that still had a mortgage on it. Sold it for a lot less than market value because I couldn't afford the associated costs to sell it on the open market. We paid the mortgage off, bought a park home with what was left and still have to pay ground rent and council tax etc. What the fuck do you suggest we do? Stop trying to make it a race to the bottom.
Our retirement park has about 55 homes and not one of us is living a life of luxury.
Fucking horrendous attitude.

FunnyRaven · 08/11/2025 22:01

Blump2783 · 08/11/2025 21:57

It isn't a plan to cut tax relief.

sounds like it is to me…

Only the first £2,000 of pension contributions via salary sacrifice would avoid NI
Anything above £2,000 would still go into your pension, but you’d have to pay NI on it

Hons123 · 08/11/2025 22:01

Helpfullright · 08/11/2025 19:32

not to be rude but on 24k a year you aren’t paying for others. You need to be on nearly double this to be a net contributor

What do you mean, on double that? If a 48K pa person has 2 children in a state school, which is up to £18K pa per place in a state school, no way will they be a nett contributor - to cover the little darlings' places alone - it is £36K.

Genevieva · 08/11/2025 22:00

zzplea · 08/11/2025 21:22

Using salary sacrifice for pension payments avoids paying National Insurance on it. The biggest beneficiary is the employer as they pay less Employer NI contribution. The employee saves a bit too.

Are people confusing salary sacrifice with the income tax relief on pension contributions? There are no plans to scrap that.

Some employers put the NI contribution into the pension. It’s a way of encouraging people to be responsible and save for retirement.

notatinydancer · 08/11/2025 22:00

speculaction

FunnyRaven · 08/11/2025 21:59

Blump2783 · 08/11/2025 21:57

It isn't a plan to cut tax relief.

ohhh ahaha maybe I should actually read it properly. My bad.

Boohoo76 · 08/11/2025 21:58

Blump2783 · 08/11/2025 21:50

Just because companies offer it, it doesn't mean people take it up. Every company I have worked at has offered it but most people I have spoken to about it don't know it exists.

Well everyone’s pension is set up that way at the companies I have worked for so everyone benefits from salary sacrifice (unless they don’t join the pension scheme).

Genevieva · 08/11/2025 21:58

randomchap · 08/11/2025 21:57

so they can have a better retirement?

Which reduces the risk of people being a burden in the state in the future.

randomchap · 08/11/2025 21:57

roses2 · 08/11/2025 20:59

Yes but if people are taxed on the pension money as they pay into it, more people will keep the money instead and either spend it or save into a bond. Why would people pay into a pension where their money is locked in until they are 70+ for no financial benefit.

so they can have a better retirement?

Blump2783 · 08/11/2025 21:57

FunnyRaven · 08/11/2025 21:43

This. I’ve literally just put plans in place to start overpaying in Jan since I’ve just received a payrise which makes me a higher rate tax payer. Excellllllent. :(

It isn't a plan to cut tax relief.

Genevieva · 08/11/2025 21:57

I’m unclear on which policies are being actively considered by the treasury, which are being presented to the press to see how they land, and which are being churned out by think tanks keen to see some of the crackpot ideas that have been gathering dust get an airing. Whichever it is, the result is hugely damaging for U.K. plc. It means no one wants to invest here and taxpayers are leaving in unprecedented number. This increases the tax burden on the rest of us and increases the interest rate in government debt. It’s an appalling situation. Someone please start promoting this country.

Viviennemary · 08/11/2025 21:55

Helpfullright · 08/11/2025 19:26

I pay over 30k a year in tax after shifting as much as I can out, trust me I’ll do anything within my power to protect my future as I’m going to get jack all!!

I dont blame you for looking after number one. After all everyone else does.

Negroany · 08/11/2025 21:55

Not taxed.

It only affects salary sacrifice, which most pensions are not, it's NI not tax, and it's after £2k pa.

AND, as we've big had the bloody budget yet, like all these threads, it's a rumour.

Cheeseontoastghost · 08/11/2025 21:54

Northerndoglover · 08/11/2025 20:08

Public sector workers are having their tax increased too.

It always baffles me about private sector workers moaning about the “gold plated” public sector pensions. If they are that great then come and be a nurse in A&E where waiting times are through the roof or teach in a class of 35 Year 2s.

Thought not.

💯 % this!!!

nearlylovemyusername · 08/11/2025 21:54

randomchap · 08/11/2025 19:27

Wow, a random twitter account has said something. It must be true.

Let's get all angry about it

Reeves plans £2bn Budget raid on UK retirement savings

Better now?

BorgQueen · 08/11/2025 21:53

You will STILL get full tax relief if they do this.
Why are you being so wifully ignorant?
You would just pay a bit of NI, if you Sal Sac £10k, you would pay £640 NI but still save
FOUR THOUSAND ££s in tax if you’re a 40% tax payer.

Blump2783 · 08/11/2025 21:53

Woodlend · 08/11/2025 20:28

Even if you don’t strictly use salary sacrifice, if you pay into a pension from your taxed income you can claim the income tax back from HMRC. Same difference.

No, it isn't. You can't claim NI back, only income tax.

lazyarse123 · 08/11/2025 21:52

As one of those troublesome pensioners can I ask what your suggestion is if the triple lock is done away with.
I got the princely increase of £34 every 4 weeks this year. I still have outgoings, for some reason the pensioner bashers think we don't have any expenses when we retire. Just like you op all my bills and food has gone up.
I do not live a life of luxury I just worked 50 fucking years for the privilege of not having to do it any more.

Blump2783 · 08/11/2025 21:50

Boohoo76 · 08/11/2025 20:14

Every company that I have worked for over the past 20 years has used salary sacrifice for pensions. Where is your evidence that most people don’t use salary sacrifice?

Just because companies offer it, it doesn't mean people take it up. Every company I have worked at has offered it but most people I have spoken to about it don't know it exists.

Boohoo76 · 08/11/2025 21:46

Holycowhowmuch · 08/11/2025 21:41

Triple lock = 3 or 4 per cent of not a lot
= not a lot.
Pensioners are on HALF the living wage. Not exactly living it up thry worked 40-50 years as they were told to. Dont deny people living in poverty.

You are right that they are on half of the living wage BUT most of them don’t have mortgages/rent, childcare and travel costs. For a two bed terrace in my area, a full time childcare place and a train pass to London, that would require £4.5k per month after tax for just those three items. That “living” wage does go very far…

FunnyRaven · 08/11/2025 21:43

RuncibleSpoons · 08/11/2025 19:33

I have literally just started overpaying my pension to cut down on my tax. Marvellous.

This. I’ve literally just put plans in place to start overpaying in Jan since I’ve just received a payrise which makes me a higher rate tax payer. Excellllllent. :(

Holycowhowmuch · 08/11/2025 21:41

Triple lock = 3 or 4 per cent of not a lot
= not a lot.
Pensioners are on HALF the living wage. Not exactly living it up thry worked 40-50 years as they were told to. Dont deny people living in poverty.

Alittlefrustrated · 08/11/2025 21:39

BerryTwister · 08/11/2025 20:00

@SomethingInTheAirToday are you aware that pensioners have no control over government policy? Why are you directing your anger at them?

Thankyou

ShesTheAlbatross · 08/11/2025 21:39

zzplea · 08/11/2025 21:22

Using salary sacrifice for pension payments avoids paying National Insurance on it. The biggest beneficiary is the employer as they pay less Employer NI contribution. The employee saves a bit too.

Are people confusing salary sacrifice with the income tax relief on pension contributions? There are no plans to scrap that.

Just because people disagree with you doesn’t mean they are all confused about the issue. OP’s link is very clear that it’s NI being talked about.

Some employers offer more generous employer pension contributions that are presumably in part paid for by the reduction in their employer NI. So employees may also find that that drops as well.

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