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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
frozendaisy · 08/11/2025 19:05

Nope won't happen this is one reason doctors went on strike last time, limits on pension "pots" that they had no choice over.

Try again @SomethingInTheAirToday

NoWordForFluffy · 08/11/2025 19:07

frozendaisy · 08/11/2025 19:05

Nope won't happen this is one reason doctors went on strike last time, limits on pension "pots" that they had no choice over.

Try again @SomethingInTheAirToday

This affects the private sector, not public. Maybe you should try again?

PandoraSocks · 08/11/2025 19:10

Maybe just wait until the budget measures are actually announced? We can all have a good moan then. Right now, it is a waste of energy.

NoWordForFluffy · 08/11/2025 19:12

Maybe Labour should stop floating every sodding idea they have in the media. Then we could stop considering each idea as it pops up! 🤷‍♀️

NorthXNorthWest · 08/11/2025 19:15

If they do it, it's more just stealing from tomorrow to pay for today's inefficient and unproductive.

nietzscheanvibe · 08/11/2025 19:17

Surely you will still be able to pay extra into your pension? You simply won't be able to do it as a means of avoiding tax? 🤷

nietzscheanvibe · 08/11/2025 19:17

Surely you will still be able to pay extra into your pension? You simply won't be able to do it as a means of avoiding tax? 🤷

SomethingInTheAirToday · 08/11/2025 19:21

nietzscheanvibe · 08/11/2025 19:17

Surely you will still be able to pay extra into your pension? You simply won't be able to do it as a means of avoiding tax? 🤷

It’s not exactly avoiding tax, is it?

FWIW I’m on £24k a year and paying into my occupational pension because I have no other option. My pay that I bring in isn’t enough for me to also pay into a SIPP.

But yes, while the older generations get a triple protected pay rise each year, my generation should just be left to be in absolute ruins. That seems totally fair.

OP posts:
YorkshireGoldDrinker · 08/11/2025 19:25

The whole damn point of salary sacrifice was that it was immune to dirty government mitts and to encourage people to save for a pension. They know the state pension is unaffordable, but now they're going to make you pay anyway. Short term politics with no regard for second order consequences.

'twas ever thus.

I work in the private sector. You trade 40+ years of your life for a living (a couple of hours in the morning and evening and then two days at the end of the week, the evening of one is filled with a knotted stomach and Sunday scaries) and then what? Retirement? Yeah, right. Pension is taxed three times:

  1. National Insurance Contributions (that's as it's going into the pension pot)
  2. Income tax (that's as it's going into the pension pot)
  3. It's subject to income tax when you start drawing from your pension

This government can sod right the hell off, and QUICK.

Helpfullright · 08/11/2025 19:26

nietzscheanvibe · 08/11/2025 19:17

Surely you will still be able to pay extra into your pension? You simply won't be able to do it as a means of avoiding tax? 🤷

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!!

CraftyNavySeal · 08/11/2025 19:26

nietzscheanvibe · 08/11/2025 19:17

Surely you will still be able to pay extra into your pension? You simply won't be able to do it as a means of avoiding tax? 🤷

A) this is just the scheme that most of us are enrolled in by our employers, we’re not trying to avoid anything

B) less money in the rest of your pay packet means less money people can afford to put in their pension.

Taxing something you want to incentivise is bad.

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

SomethingInTheAirToday · 08/11/2025 19:28

What’s the point anymore?

you work forty hours a week minimum, have no time in the week to do anything, no money spare to do anything at the weekend, slave away living in shitty rentals and being promised home ownership, for what? To pay for other people to get the things you never will

OP posts:
ShesTheAlbatross · 08/11/2025 19:31

CraftyNavySeal · 08/11/2025 19:26

A) this is just the scheme that most of us are enrolled in by our employers, we’re not trying to avoid anything

B) less money in the rest of your pay packet means less money people can afford to put in their pension.

Taxing something you want to incentivise is bad.

Your last sentence is bang on. If this is true it’s ridiculous. The state pension is becoming more and more unaffordable - they need people paying into private pensions because the state pension cannot exist in its current form forever.

Helpfullright · 08/11/2025 19:32

SomethingInTheAirToday · 08/11/2025 19:28

What’s the point anymore?

you work forty hours a week minimum, have no time in the week to do anything, no money spare to do anything at the weekend, slave away living in shitty rentals and being promised home ownership, for what? To pay for other people to get the things you never will

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

RuncibleSpoons · 08/11/2025 19:33

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

ShesTheAlbatross · 08/11/2025 19:33

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

I appreciate it may not be true but it’s not one twitter account, it’s being reported in multiple places.

YorkshireGoldDrinker · 08/11/2025 19:36

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

While true, it misses the principle. You're trading your time (that you will never get back) for the life you enjoy, while others will not have to.

AlastheDaffodils · 08/11/2025 19:39

YorkshireGoldDrinker · 08/11/2025 19:25

The whole damn point of salary sacrifice was that it was immune to dirty government mitts and to encourage people to save for a pension. They know the state pension is unaffordable, but now they're going to make you pay anyway. Short term politics with no regard for second order consequences.

'twas ever thus.

I work in the private sector. You trade 40+ years of your life for a living (a couple of hours in the morning and evening and then two days at the end of the week, the evening of one is filled with a knotted stomach and Sunday scaries) and then what? Retirement? Yeah, right. Pension is taxed three times:

  1. National Insurance Contributions (that's as it's going into the pension pot)
  2. Income tax (that's as it's going into the pension pot)
  3. It's subject to income tax when you start drawing from your pension

This government can sod right the hell off, and QUICK.

Eh? I appreciate the anger but your facts are wrong

  1. Pension contributions are free of income tax and there is no proposal to change that
  2. Pension contributions are free of national insurance. There is a proposal to remove this benefit for salary sacrifice schemes
  3. Pension contributions are indeed taxed on withdrawal, except for your 25% tax free lump sum. There is no national insurance on pension withdrawals. For many people their marginal income tax rate in retirement will be lower than their marginal tax rate while working.
SomethingInTheAirToday · 08/11/2025 19:42

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

But the point still stands.

what’s the point in trying to work up and do well for yourself when you’re never going to achieve anything because the pensioners want to live in luxury?

OP posts:
Happyher · 08/11/2025 19:42

Every time some measure to increase revenue to the government is mooted there’s always a pile on about why it’s unfair. Everyone expects things to get better straightaway but nobody seems willing to pay for it

222days · 08/11/2025 19:48

AlastheDaffodils · 08/11/2025 19:39

Eh? I appreciate the anger but your facts are wrong

  1. Pension contributions are free of income tax and there is no proposal to change that
  2. Pension contributions are free of national insurance. There is a proposal to remove this benefit for salary sacrifice schemes
  3. Pension contributions are indeed taxed on withdrawal, except for your 25% tax free lump sum. There is no national insurance on pension withdrawals. For many people their marginal income tax rate in retirement will be lower than their marginal tax rate while working.
Edited

So what they should do is start applying national insurance to the incomes of actual pensioners, who are the biggest users of welfare and healthcare by far (accounting for almost 50% of total public spending when they are only 15% of the population, and with a lifetime tax shortfall of £200k per pensioner in real terms between the benefits and services they have claimed and used and the tax they have paid in real terms). They are also, on average, the wealthiest cohort in society.

What they should not be doing is taking yet more from young people who haven’t a hope of achieving the same standards of living that these pensioners enjoy for having worked in similar occupations. It’s disgraceful.

Hellohelga · 08/11/2025 19:49

NoWordForFluffy · 08/11/2025 19:12

Maybe Labour should stop floating every sodding idea they have in the media. Then we could stop considering each idea as it pops up! 🤷‍♀️

Maybe the media should stop second guessing and making things up. Just wait for the budget.

NoWordForFluffy · 08/11/2025 19:50

Hellohelga · 08/11/2025 19:49

Maybe the media should stop second guessing and making things up. Just wait for the budget.

Naaaah. This is Labour floating stuff. It's what they do.

roses2 · 08/11/2025 19:51

I’d be surprised if this happens as it would mean there would be zero incentive whatsoever for people to pay into private pensions which would be an even bigger disaster - I really hope the government aren’t that myopic.

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