Question to the Department for Work and Pensions:

To ask His Majesty's Government how has the proportion of AI expenditure within the Department for Work and Pension’s overall IT budget changed since 2018; what assessment they have made of the potential savings and efficiency gains that could be achieved through greater use of AI and modern IT systems; and what steps they are taking to build in-house expertise and identify new opportunities for AI deployment across departmental operations.

Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)

The Department for Work and Pensions (DWP) did not allocate direct funding for AI prior to 2023/2024. Direct investment began in 2023/24, representing around 0.4% of the IT budget. In 2024/25, this increased to approximately 2.5% and 2.2% in 2025/26. Whilst the current year (2025/26) shows a reduction in % terms, the £’s investment represents a similar value, demonstrating the Department’s drive to use AI within its digital transformation strategy.

DWP’s Strategy for 2030 sets the direction for how we will transform delivery of our services over the next few years. AI and modern IT systems will play an important role in that strategy.

We collaborate with stakeholders to identify key areas where AI can solve business challenges and add value, co-designing solutions with these stakeholders.

A secure version of Microsoft Copilot Chat is now available to all DWP colleagues. We are providing this capability to enable colleagues to safely explore how AI can contribute to their roles.

Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government whether participating employers in the Local Government Pension Scheme are permitted to hold separate notional investment strategies within their administering authority’s pension fund; and, if not, whether administering authorities have any discretion to apply differentiated investment approaches or notional asset allocations for individual employers as part of their Funding Strategy Statements or Investment Strategy Statements.

Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)

It is for administering authorities to set an investment strategy for their fund. Relevant legislation, regulations and guidance does not preclude a fund from setting a different strategy for different employers.

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)

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.

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)

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.

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)

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.

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)

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.

Found: Apologies were received from Baroness Stedman-Scott.

Found: Apologies were received from Lord Faulkner of Worcester, Baroness Williams of Trafford and Baroness Stedman-Scott

Found: Apologies were received from Lord Faulkner of Worcester, Baroness Williams of Trafford and Baroness Stedman-Scott

Found: )   Lord Faulkner of Worcester Lord Hogan-Howe Baroness Hussein-Ece Earl of Kinnoull Baroness Stedman-Scott