National Insurance Contributions (Employer Pensions Contributions) Bill

Debate between Chris Vince and Charlie Maynard

Committee of the whole House
Wednesday 21st January 2026 Commons Chamber

[Chris Vince]

The shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), challenged Labour MPs to champion their constituencies. One of the biggest concerns I have about pensions in my constituency of Harlow is the number of people who are not paying into any pension at all, particularly those who are self-employed or lower earners. Does the Liberal Democrat spokesperson agree that the real conversation that we in this place need to be having about pensions is how we encourage people in my constituency and beyond to save for their futures, which I think is what he is suggesting?

[Charlie Maynard]

I absolutely agree—well said.

The Government may well say that the Bill will not affect low earners, who are likely not to be saving £2,000 in a given year, as the hon. Member for Harlow (Chris Vince) has just said. However, that is too simplistic a way to look at this issue. The impact assessment by His Majesty’s Revenue and Customs found that an estimated 7.7 million employees currently use salary sacrifice to make pension contributions—that is around 25% of all employees. Of these, 3.3 million sacrifice more than £2,000 of salary or bonuses. That leaves millions of middle earners who are already feeling a significant squeeze as a result of myriad other cost of living pressures, who have had their taxes raised by the previous Conservative Government, and who are now facing an even greater hit due to this Government’s jobs tax and the extension of frozen income tax thresholds. If this Bill discourages those people from putting money away for their safety net in later life, the Treasury will pay the price in the long run.

Before the Budget, the Association of British Insurers warned that two in five Brits will save less in their pension if a cap on salary sacrifice schemes is introduced. With social care budgets also stretched to breaking point, we should be doing everything we can to incentivise people who are able to put money aside for a comfortable and supported retirement to do so. As the Institute of Chartered Accountants in England and Wales pointed out in its response:

“At a time when there is a pensions commission considering the adequacy of pension saving, this demonstrates a lack of joined-up thinking from the government.”