Story perspectives

UK Considers Salary Sacrifice Reforms Amid £4 Billion Savings

11/1/2025

Center

UK Government Reforms

The United Kingdom government is considering reforms to salary sacrifice schemes, with HM Revenue and Customs estimating savings of £4 billion annually.
Abolishing salary sacrifice could negatively impact millions by reducing pension contributions and discouraging good employer plans.
A cap on contributions is seen as a compromise that could shield workers from higher costs.
Think tanks such as the Resolution Foundation and the Institute for Fiscal Studies (IFS) back reform.

Right

Reeves Considers Tax Hike

Chancellor Rachel Reeves, the UK Chancellor of the Exchequer, is considering an Autumn Budget income tax hike that could cost pensioners up to £2,500 annually and aims to raise about £6 billion by increasing income tax and reducing National Insurance.
The plan could affect nearly nine million state pension recipients.
Keir Starmer, leader of the Labour Party, has not ruled out tax increases, despite Labour commitments, while retirees recovered £48.5 million in excessive tax deductions.

1 of 2

UK Government Reforms

The United Kingdom government is considering reforms to salary sacrifice schemes, with HM Revenue and Customs estimating savings of £4 billion annually.
Abolishing salary sacrifice could negatively impact millions by reducing pension contributions and discouraging good employer plans.
A cap on contributions is seen as a compromise that could shield workers from higher costs.
Think tanks such as the Resolution Foundation and the Institute for Fiscal Studies (IFS) back reform.

1 / 2