Asked by: Baroness Stedman-Scott (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact on working people, particularly those earning below the higher-rate threshold, of removing the National Insurance exemption on salary-sacrificed pension contributions above £2,000; and what modelling they have conducted on the distributional impacts across income deciles.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice. The TIIN is available here: https://www.gov.uk/government/publications/salary-sacrifice-reform-for-pension-contributions-effective-from-6-april-2029
As set out in the TIIN, of the estimated 7.7 million employees who currently use salary sacrifice to make pension contributions, 3.3 million sacrifice more than £2,000 of salary or bonuses. This means 44% would be impacted by this measure, while 56% - around 4.3 million people - are fully protected by the £2,000 threshold. Of those with salary sacrifice contributions in excess of the cap, the average additional employee NICs liability is estimated to be £84 for the tax year 2029/30.
The Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook (EFO) set out the estimated yield for this measure. Their assumption on passthrough is in line with assumptions for previous changes to employer NICs and is also reflected in the Government’s published costing note.
This change applies to all employers who use salary sacrifice for pensions, regardless of whether they are public sector or private sector. Many public sector employers are prohibited from using salary sacrifice for pensions under the rules of "Managing Public Money."
The government supports all individuals to save into pensions through a generous system of income tax and NICs reliefs worth over £70 billion a year.
This is the fairest way to support pensions saving whilst ensuring relief is targeted at those who need it most.
Asked by: Baroness Stedman-Scott (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the OBR’s assumption that, following the decision to apply National Insurance to salary-sacrificed pension contributions above £2,000, employers will pass 76 per cent of the additional cost to employees.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice. The TIIN is available here: https://www.gov.uk/government/publications/salary-sacrifice-reform-for-pension-contributions-effective-from-6-april-2029
As set out in the TIIN, of the estimated 7.7 million employees who currently use salary sacrifice to make pension contributions, 3.3 million sacrifice more than £2,000 of salary or bonuses. This means 44% would be impacted by this measure, while 56% - around 4.3 million people - are fully protected by the £2,000 threshold. Of those with salary sacrifice contributions in excess of the cap, the average additional employee NICs liability is estimated to be £84 for the tax year 2029/30.
The Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook (EFO) set out the estimated yield for this measure. Their assumption on passthrough is in line with assumptions for previous changes to employer NICs and is also reflected in the Government’s published costing note.
This change applies to all employers who use salary sacrifice for pensions, regardless of whether they are public sector or private sector. Many public sector employers are prohibited from using salary sacrifice for pensions under the rules of "Managing Public Money."
The government supports all individuals to save into pensions through a generous system of income tax and NICs reliefs worth over £70 billion a year.
This is the fairest way to support pensions saving whilst ensuring relief is targeted at those who need it most.
Asked by: Baroness Stedman-Scott (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact on public and private-sector pension disparities of the policy to apply National Insurance to salary-sacrificed pension contributions above £2,000.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice. The TIIN is available here: https://www.gov.uk/government/publications/salary-sacrifice-reform-for-pension-contributions-effective-from-6-april-2029
As set out in the TIIN, of the estimated 7.7 million employees who currently use salary sacrifice to make pension contributions, 3.3 million sacrifice more than £2,000 of salary or bonuses. This means 44% would be impacted by this measure, while 56% - around 4.3 million people - are fully protected by the £2,000 threshold. Of those with salary sacrifice contributions in excess of the cap, the average additional employee NICs liability is estimated to be £84 for the tax year 2029/30.
The Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook (EFO) set out the estimated yield for this measure. Their assumption on passthrough is in line with assumptions for previous changes to employer NICs and is also reflected in the Government’s published costing note.
This change applies to all employers who use salary sacrifice for pensions, regardless of whether they are public sector or private sector. Many public sector employers are prohibited from using salary sacrifice for pensions under the rules of "Managing Public Money."
The government supports all individuals to save into pensions through a generous system of income tax and NICs reliefs worth over £70 billion a year.
This is the fairest way to support pensions saving whilst ensuring relief is targeted at those who need it most.
Asked by: Baroness Stedman-Scott (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact on long-term pension adequacy of removing the NICs exemption on salary-sacrificed pension contributions above £2,000.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice. The TIIN is available here: https://www.gov.uk/government/publications/salary-sacrifice-reform-for-pension-contributions-effective-from-6-april-2029
As set out in the TIIN, of the estimated 7.7 million employees who currently use salary sacrifice to make pension contributions, 3.3 million sacrifice more than £2,000 of salary or bonuses. This means 44% would be impacted by this measure, while 56% - around 4.3 million people - are fully protected by the £2,000 threshold. Of those with salary sacrifice contributions in excess of the cap, the average additional employee NICs liability is estimated to be £84 for the tax year 2029/30.
The Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook (EFO) set out the estimated yield for this measure. Their assumption on passthrough is in line with assumptions for previous changes to employer NICs and is also reflected in the Government’s published costing note.
This change applies to all employers who use salary sacrifice for pensions, regardless of whether they are public sector or private sector. Many public sector employers are prohibited from using salary sacrifice for pensions under the rules of "Managing Public Money."
The government supports all individuals to save into pensions through a generous system of income tax and NICs reliefs worth over £70 billion a year.
This is the fairest way to support pensions saving whilst ensuring relief is targeted at those who need it most.
Asked by: Baroness Stedman-Scott (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of increased employer National Insurance contributions on employment opportunities for young people in the hospitality sector, and of the consequences for the number of young people who are not in education, employment or training.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A detailed assessment of the policy has been published by HMRC in their Tax Information and Impact Note. The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations, as well as an overview of the equality impacts.
The Office for Budget Responsibility (OBR) also published the Economic and Fiscal Outlook (EFO), which sets out a detailed forecast of the economy and public finances. With all policies considered, the OBR's March 2025 EFO forecasts the employment level to increase from 33.6 million in 2024 to 34.8 million in 2029.
This Government is committed to providing young people with the best start to their working lives. The Government will deliver a Youth Guarantee so that all 18 to 21-year-olds in England have access to education, training or help to find a job or an apprenticeship. To support this, we are funding eight trailblazers across England to test how different elements of the Guarantee can be brought together into a coherent offer for young people. The Government is also expanding Sector-based Work Academy Programmes to provide 100,000 places in 2025/26, providing a work placement, training and a guaranteed interview that can kickstart a new career and support young people into work.
Asked by: Baroness Stedman-Scott (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the impact of changes to employer National Insurance contributions on the construction sector.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to employer NICs. The TIIN sets out the impact of the policy on the exchequer, the economic impacts of the policy, and the impacts on individuals, businesses, and civil society organisations, as well as an overview of the equality impacts.