Salary sacrifice offers include keeping take-home pay due to reduced employee NICs and NIC advantages for employers, enabling more generous workplace benefits.

Observers warn employers may rework pay and pension offers to shield themselves from the charge, possibly delivering less net saving for workers than anticipated.

The Office for Budget Responsibility estimates the measure could raise about £4.7 billion in extra revenue in the 2029/30 fiscal year.

The Reuters source notes include detailed figures and quotes from Hymans Robertson and Steve Webb, with exchange-rate context for USD equivalents.

The document is described as published in error ahead of the Budget, with the report reflecting potential policy impacts rather than confirmed changes.

From April 2029, a £2,000 annual cap on pension contributions via salary sacrifice will apply, and NICs will be charged on any amount above the cap for employee contributions.

The policy is projected to lift NIC receipts by about £4.7 billion in 2029/30 and £2.6 billion in 2030/31, reflecting changes in tax treatment for pension contributions.

The estimate notes the reform would change NIC treatment and pension relief under the new framework.

Supporters acknowledge aims to address the retirement income gap but emphasize careful rollout to avoid unintended consequences.

Industry and policy experts argue the new £2,000 annual salary sacrifice cap is short-sighted and could undermine long-term retirement security by reducing incentives to save and by potentially limiting employer pension support.

The broader context cites ongoing retirement-adequacy concerns: automatic enrollment expanded coverage, but saving levels remain pressured by cost of living and inflation.

While participation rose, many fear insufficient retirement savings under continued cost-of-living pressures.