"A £5 billion tax raid on salary sacrifice pension schemes announced in Rachel Reeves's Budget has emerged as the single most damaging policy for business confidence, according to new research from the Confederation of British Industry. Almost three-quarters (73%) of companies surveyed by the CBI said the move to levy national insurance contributions on pension salary sacrifice above a new cap was the most harmful measure in the Budget, warning it risks deterring workers from saving for retirement and disproportionately hitting middle earners."
"From 2029, however, the Chancellor's reforms will cap salary sacrifice pension contributions at £2,000 a year. Any contributions above that level will attract employee national insurance at 8% on earnings below £50,268 and 2% above that threshold, while employers will pay full employer NICs at 15%. The Treasury estimates the measure will raise £4.8 billion in its first year."
New CBI research finds the Budget measure to cap salary sacrifice pension contributions and levy national insurance above the cap is seen as the most harmful policy for business confidence. About 73% of surveyed companies warned the change could deter retirement saving and hit middle earners. Over 100 businesses and trade bodies reported bleak sentiment, with 84% saying the Budget will not lower business costs and 62% saying it will not boost investment confidence. Firms cite cumulative pressures from higher business rates, rising minimum wages and employer NICs squeezing margins amid weak demand. The Treasury expects £4.8bn revenue in year one.
Read at Business Matters
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