Pensions salary sacrifice: changes from 2029

Major pension reforms around salary sacrifice, announced in the Autumn Budget 2025, will have an impact on employers and their employees. From April 2029, salary sacrifice pension contributions exceeding £2,000 per employee will be subject to Employee’s and Employer’s National Insurance Contributions (NICs).

In our new video, Employment Taxes Director Stephen Baker takes you through:

How the pensions salary sacrifice rules are changing
How employers should prepare: assessing the impact before April 2029
The bigger picture: Autumn Budget 2025 and related tax measures
Thoughts on whether the Government may defer these measures

Our recommended next steps

Don’t panic – these changes are 3+ years away!
Model the financial impact
Review salary sacrifice arrangements
Engage with payroll and pension providers
Review employment contracts and policies
Update reward & compensation strategy
Budgeting & forecasting
Plan internal & external communications
Coordinate with HR, finance & tax advisers

How BKL can help

With specialists in payroll, employment tax and people & culture (HR), we give employers end-to-end support around the salary sacrifice lifecycle. By building an understanding of your goals as an employer and a business, we can help you to put salary sacrifice arrangements in place, ensuring tax efficiency and compliance.

For a chat about how we can help you with salary sacrifice planning and your tax responsibilities as an employer, get in touch with Stephen Baker and our Head of Client Payroll Gary Silver, or send us an enquiry.