Salary Sacrifice Changes

[numenor]

Does this mean we can’t still sacrifice so we qualify for the childcare benefits?

confused!!

Looks like this won’t start until 2029…

I don’t think it will stop you doing this, you will just have to pay 2% NI on contributions.

I bet business will pass on the employer NI costs which are 15%

This is the hidden nasty in today's budget.

You can but you’ll pay NI on it over £2000. I think.

Will labour still be in power if latest next GE 2029?

You can still put 'surplus' cash into you pension and get tax relief.

I really can't believe this isn't getting more focus.

Today you can pay into your DC pension tax free, and NI free via salary sacrifice. Most decent companies match payments. e.g. a person on £50k might put in 5% and the company might match so put in another 5%. So 10% of salary goes into your pension pot (£5k).

Now the government has said that employee and employer NI will be deducted from pension contributions from April 2029. I doubt the employers will want to absorb that tax and so will pass it on.

If you earn under about £50k per year then employee NI is 8% and Employer NI is 15%. So pension contributions over £2k per year will be taxed at 23%
That is £1,150 worse off

If you earn over about £50k per year then employee NI is 2%. So pension contributions over £2k per year will be taxed at 17%.
That is £850 worse off

I'm amazed there isn't more uproar about this. A huge new tax which hits middle and upwards earners who are trying to save for old age. When we have a pensions crisis.

Implementation is a long way off though so it could get repealed. I suspect it's timed to hit in a new government and in the hope people will forget.