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Chancellor's Pension Plan Sparks Controversy Ahead of Budget

11/9/2025

Summary

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Chancellor of the Exchequer Rachel Reeves proposes changes to salary sacrifice pension schemes to raise £2 billion for a £30 billion public finance shortfall.
The plan caps tax-free contributions at £2,000 annually and taxes amounts above this threshold with National Insurance.
Critics warn the measure would reduce take-home pay and discourage retirement saving, facing opposition from businesses and pension experts ahead of the 26 November 2025 Budget.

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Story summary

Chancellor of the Exchequer Rachel Reeves proposes changes to salary sacrifice pension schemes to raise £2 billion for a £30 billion public finance shortfall.
The plan caps tax-free contributions at £2,000 annually and taxes amounts above this threshold with National Insurance.
Critics warn the measure would reduce take-home pay and discourage retirement saving, facing opposition from businesses and pension experts ahead of the 26 November 2025 Budget.