Pensions salary sacrifice cap is coming, but are you ready?
Pension changes are coming. From a new cap on pension salary sacrifice and the introduction of the government’s Pensions Dashboards, through to the value for money framework, employers are facing significant changes over the next few years.
REBA’s Future of Pensions 2026 survey focuses on the biggest pension challenges facing employers as they strive to improve the chances of achieving retirement adequacy for their workforce. One area of change the survey focuses on is the salary sacrifice cap.
From April 2029, salary sacrifice on pensions will be capped at £2,000 per employee per year, meaning any employee pension contributions above the cap will be subject to employer and employee National Insurance contributions (NICs).
While the urgency to tackle financial resilience continues to be driven by government initiatives, such as the Financial Inclusion Strategy, the salary sacrifice changes could encourage millions of workers to reduce their pension savings.
Proactive planning, transparent communication, and careful realignment of reward strategies are vital. Employers that initiate these measures early may be best positioned to manage the transition while preserving employee trust and engagement.
To find out how your peers are addressing these changes and other upcoming pensions updates take part in REBA’s latest survey.
Supplied by REBA Associate Member, REBA
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