Rachel Reeves capped the National Insurance breaks from pension salary sacrifice at 2k per year and experts are saying this basically nukes a savings system that tons of UK workers and businesses depend on. The Treasury wants to grab 4.7 billion but financial planners and HR people think it wrecks retirement planning and makes hiring way harder for smaller companies that already can't match big salaries.
Startups and scale-ups used enhanced pension contributions to compete for talent when they couldn't offer fat paychecks. The new limit kills that tax efficiency and piles on top of the higher employer NI from last year. Small business owners say they'll freeze hiring and cut perks instead of firing people but recruiting experienced candidates just got brutal.
Middle earners lose the most because anything past the cap means higher NI for everyone and basically amounts to a pay cut. Advisers warned that pension pots could shrink by tens of thousands over time while the government banks billions in extra revenue.
Startups and scale-ups used enhanced pension contributions to compete for talent when they couldn't offer fat paychecks. The new limit kills that tax efficiency and piles on top of the higher employer NI from last year. Small business owners say they'll freeze hiring and cut perks instead of firing people but recruiting experienced candidates just got brutal.
Middle earners lose the most because anything past the cap means higher NI for everyone and basically amounts to a pay cut. Advisers warned that pension pots could shrink by tens of thousands over time while the government banks billions in extra revenue.
