Starting April 2029, the UK will cap NI relief on pension salary sacrifice at £2,000 annually, affecting millions of workers and reducing tax benefits for higher earners.

Starting in April 2029, the UK will limit National Insurance relief on pension salary sacrifice to £2,000 annually, affecting around 3.3 million workers who currently contribute more. Contributions above this threshold will no longer be NI-free, reducing tax advantages and take-home pay for higher earners, while employers face increased NI costs. The change, confirmed in the 2025 Autumn Budget, impacts about 7.7 million employees using salary sacrifice, with experts urging early planning to adjust savings strategies before the cap takes effect.