Pensions in the Budget
19th Feb 2026
Predictions appeared to centre around changes to salary sacrifice in last year’s budget for pensions. The announcement was a significant change, but the overall tax relief was preserved. What was announced was a £2,000 annual cap to the amount exempt from National Insurance for employee contributions. The change came in from April 2009.
What does this mean?
No immediate change: employers and employees have ample time to plan for the 2029 changes, until then salary sacrifice operates as normal, offering significant tax and NI savings.
Higher earners: The change will impact mostly higher earners contributing above £2,000 via salary sacrifice. NI costs will increase from 2029.
 
