# £2,000 cap for salary-sacrificed pension contributions – OBR

By Helen Morrissey — 2025-11-26

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Salary sacrifice on pension contributions enables workers to get the full value of every pound through income tax and National Insurance savings.

“Restricting the amount of someone’s salary that can be sacrificed and receive National Insurance relief to £2,000 a year may not have a huge impact on lower to middle incomes but will act as a disincentive to those on higher incomes who were looking to make the most from their pension through salary sacrifice.

“At a time when there is such a focus on pension adequacy it seems counter intuitive to put barriers in the way to boosting contributions.

“Given the latest data from the HL Savings and Resilience Barometer shows only 43 per cent of households are on track for an adequate retirement income there is clearly more to do.

“The ongoing pension adequacy review needs to ensure that the appropriate incentives are in place to help people invest for their future.

“With the changes not due to come in until April 2029 there’s still time to take advantage of the system as it currently stands to make contributions to your pension under salary sacrifice and take advantage of the National Insurance savings.”

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