Millions of pension savers facing salary sacrifice hit

AROUND 3.3 million pension savers are on course to be clobbered by salary sacrifice changes announced in the Budget, HM Revenue and Customs (HMRC) figures indicate.

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Guidance published online by HMRC about the changes said an estimated 7.7 million employees currently use salary sacrifice to make pension contributions.

Of these, 3.3 million sacrifice more than £2,000 of salary or bonuses.

Changes announced in the Budget will mean salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from national insurance (NI) from April 2029. Contributions above £2,000 will be treated as ordinary employee pension contributions in the tax system and subject to NI contributions.