Nearly two thirds (62 per cent) of pension professionals want the upcoming reforms to salary sacrifice on pension contributions to be scrapped, polling from the Society of Pension Professionals (SPP) has found.

From April 2029, an annual £2,000 cap will be placed on the amount of employee pension contributions that can be paid through a salary sacrifice scheme without being subject to national insurance contributions (NIC).

The SPP found the majority of survey respondents wanted the reforms to be abandoned, while just 5 per cent agreed with the government that the reforms should be implemented unchanged.

Almost a quarter (24 per cent) said the reforms should be implemented but in a different form, while 9 per cent believed salary sacrifice for pension contributions should be abolished altogether.

“This industry polling reveals strong support for rethinking these reforms, which is not a huge surprise given the changes will result in higher costs to employees – including over 850,000 basic rate taxpayers - and employers, along with less pension saving when more saving is needed,” commented Barnett Waddingham partner and SPP member, Steve Hitchiner.

“Salary sacrifice has long been an effective way of helping both employers and employees maximise pension contributions while reducing National Insurance costs.

“Restricting the NIC exemption from 2029 risks undermining those benefits and could discourage some employers from continuing to offer salary sacrifice arrangements altogether.”

Hitchiner noted that while there was recognition from some respondents that reform may be necessary, the findings showed there was little appetite for the proposals in their current form.

“With a new Prime Minister and new Chancellor, the government should take this opportunity to engage with the pensions industry to explore alternative approaches that achieve its objectives without reducing incentives to save for retirement or placing additional financial burdens on workers and employers,” he concluded.

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