Salary sacrifice reforms confirmed after early OBR leak
Author: LAPF Investments | Published: November 26, 2025
The Chancellor has confirmed reforms to salary sacrifice pension contributions, capping relief at £2,000 from April 2029.
Contributions above this threshold will be subject to National Insurance, a measure projected to generate £4.7 bn. Income tax and NI relief on pension contributions remain unchanged.
The salary sacrifice cap was among several pension and fiscal measures first revealed in a report from the OBR after it was mistakenly published online before the Chancellor delivered her Budget speech. The leak triggered a public apology from the watchdog, which said the early exposure was a “technical error.”
Industry groups noted the cap may affect take‑home pay for many employees and could have cost implications for employers.
Other pensions‑related changes announced included the indexation of pre‑1997 pensions in the Pension Protection Fund and Financial Assistance Scheme, and the abolition of Class 2 Voluntary NI contributions for people living abroad.
In post Budget documentation, the government also confirmed property transfers within the Local Government Pension Scheme will be subject to Stamp Duty Land Tax under new rules in the Finance Bill 2026–27.
