Workplace Pensions: Small Businesses
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of applying National Insurance to salary-sacrificed pension contributions above £2,000 from 2029 on small and medium-sized employers, pension take-up and long-term pension savings; and whether she plans to bring forward measures to mitigate the impact on pension auto-enrolment and retirement preparedness.
Answered by Torsten Bell
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice.
Small and medium-sized employers (SMEs) are less likely to be affected by these changes. Based on the latest ASHE data (2023/24), 28% of employees of SMEs use pension salary sacrifice, compared to 39% of larger employers.
The government supports all individuals to save into pensions through a generous system of tax reliefs worth over £70 billion a year.
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