{"id":582683,"date":"2026-05-14T00:54:22","date_gmt":"2026-05-14T00:54:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/582683\/"},"modified":"2026-05-14T00:54:22","modified_gmt":"2026-05-14T00:54:22","slug":"new-hmrc-salary-sacrifice-rule-leaves-1-million-households-900-worse-off","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/582683\/","title":{"rendered":"New HMRC salary sacrifice rule leaves 1 million households \u00a3900 worse off"},"content":{"rendered":"

Government will introduce a \u00a32,000 cap on the amount that workers can pay into their pension via salary sacrifice\"Government<\/p>\n

Government will introduce a \u00a32,000 cap on the amount that workers can pay into their pension via salary sacrifice<\/p>\n

A HMRC salary sacrifice rule change has left one million households will be almost \u00a3900 a year worse off. Rachel Reeves, the Labour Party<\/a> Chancellor, has launched a tax raid on salary sacrifice schemes.<\/p>\n

And the Institute for Fiscal Studies (IFS) has warned targeting pension salary sacrifice contributions will hit 4.7 million employees when it comes into force in April 2029.<\/p>\n

The Labour Party government will introduce a \u00a32,000 cap on the amount that workers can pay into their pension via salary sacrifice before contributions are liable for National Insurance (NI).<\/p>\n

READ MORE Two new compulsory tests on table for drivers over 70 in England – full list<\/a><\/p>\n

The IFS said the top 10 per cent of earners had the most to lose from the reforms, with around one million households to be \u00a3888 worse off on average each year.<\/p>\n

In total, households affected by the raid will be \u00a3540 worse off on average, according to calculations by the think tank.<\/p>\n

Sir Steve Webb, a partner at LCP and former pensions minister, said: \u201cThe policy doesn\u2019t just affect people putting thousands into pensions.”<\/p>\n

Mr Webb, who was the creator of the Triple Lock metric, added: “It affects people on modest wages, who may not be putting much in a pension, but whose pay just gets held down for possibly years because of all of this.\u201d<\/p>\n

The former Liberal Democrats<\/a> and Conservative Party<\/a> pensions minister dded that the changes would also force businesses \u201cto divert time and energy to recouping the costs and perhaps rearranging their pensions instead of getting on with the day job of creating jobs and growth\u201d.<\/p>\n

Matthew Oulton, a research economist at the IFS, said: \u201cRather than being a principled reform to the taxation of pensions, the change creates another new arbitrary line in the tax system.\u201d<\/p>\n

The Government said it did not recognise the figures and the \u201cvast majority\u201d of people would not be affected.<\/p>\n","protected":false},"excerpt":{"rendered":"Government will introduce a \u00a32,000 cap on the amount that workers can pay into their pension via salary…\n","protected":false},"author":2,"featured_media":582684,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,2218,4174,4175,56,54,55],"class_list":["post-582683","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-hmrc","tag-personal-finance","tag-personalfinance","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/582683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=582683"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/582683\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/582684"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=582683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=582683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=582683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}