Other major pension companies and wealth managers Standard Life, Fidelity International, Hargreaves Lansdown, Netwealth, Shackleton, St James\u2019s Place, Rathbones and Quilter have also pledged their support.<\/p>\n
Opperman, the former Conservative MP who was pensions minister between June 2017 and September 2022, said: \u201cThe change to salary sacrifice is an ill-thought-through policy done primarily to satisfy the Office for Budget Responsibility. It will obviously impact saving, and there will be a negative long-term effect on people\u2019s savings and pensions.\u201d<\/p>\n
\u2022 How much will the salary sacrifice pensions raid cost you? Use our calculator<\/a><\/p>\n Mike Ambery from Standard Life \u2014 part of the UK\u2019s largest pensions company, Phoenix Group, which has \u00a3295 billion in assets under administration \u2014 said: \u201cRetirement savings levels in the UK are a way off where they need to be and employers and workplace pensions are central to addressing this challenge.<\/p>\n \u201cCapping salary sacrifice will create an invidious choice, either millions of employees will have to stump up more to maintain their pension contributions or employers will need to step in and offset the cost. We need to be increasing levels of pension saving, not making it more expensive.\u201d<\/p>\n Salary sacrifice allows workers to give up part of their gross salary in exchange for benefits, notably pension contributions. The money comes out of pay before it is subject to income tax or national insurance. Employees can pay up to \u00a360,000 a year into their pension scheme this way. The Treasury estimates 3.3 million people sacrifice more than \u00a32,000 per year.<\/p>\n Reeves\u2019s changes mean a worker who earns \u00a352,000 a year and makes 10 per cent employee contributions into their pension using salary sacrifice will pay an extra \u00a3256 a year in national insurance, according to calculations by the consultancy, LCP.<\/p>\n \u2022 The seven apps that will help you invest<\/a><\/p>\n The government is in the middle of a review into pension saving and there are worries that millions could be on track for poverty in retirement. In July, the pensions commission reported \u201cstark findings\u201d that 45 per cent of adults were saving nothing for retirement.<\/p>\n Liz Kendall, then the work and pensions secretary, said the commission would aim \u201cto tackle the barriers that stop too many saving\u201d.<\/p>\n Mark FitzPatrick, the chief executive of St James\u2019s Place, Britain\u2019s largest wealth manager with \u00a3220 billion under management, said: \u201cAny change affecting pensions needs real caution, because it risks unsettling confidence in one of the most effective and established long\u2011term savings vehicles. Millions already face uncertain or insufficient income in retirement, and tightening the rules around salary sacrifice risks making pension saving feel more complicated and less appealing at a time when simplicity matters most.<\/p>\n
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