Autumn Budget 2025: Applying National Insurance to salary-sacrificed pension contributions will worsen pension under-saving problem

Zoe Alexander, Executive Director of Policy and Advocacy at Pensions UK, said: “Over half of savers are on course to fall short of the retirement income targets set by the 2005 Pensions Commission. Applying National Insurance to salary-sacrificed pension arrangements above £2,000 will harm the economy, businesses and pension saving.

“In a recent survey of Pensions UK members, 75% of respondents said they believe savers are likely or very likely to alter retirement contributions or decisions as a result of the changes. More, not less, pension saving is needed if everyone is to have an adequate income in retirement.

“However, applying the changes from 2029 should at least give businesses time to prepare and we urge them to consider how they can maintain the generosity of their workplace pension arrangements to lessen the harm to savers’ retirement prospects.”

Mark Smith, Head of Media Relations
020 7601 1726 | [email protected]

Cali Sullivan, Senior PR Manager
020 7601 1761 | [email protected]