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UK Commons passes Second Reading of Bill applying NICs to pension salary sacrifice over £2,000 from April 2029; Committee of the whole House to follow

Published on: 23 December 2025

Published by a LexisNexis Pensions expert
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Original news Source: Hansard Debate: National Insurance Contributions (Employer Pensions Contributions) Bill, Volume 777: debated on Wednesday 17 December 2025 News summary

MPs have approved the Second Reading of the National Insurance Contributions (Employer Pensions Contributions) Bill following a concise yet pointed Commons exchange on 17 December 2025. The government measure (bill 344 in the 2024–25 session), brought forward on 4 December 2025, would create a power to levy NICs on pension salary sacrifice amounts above £2,000 per year, with implementation scheduled for April 2029. Ministers contended the proposal is a proportionate, targeted step to contain the fast-escalating fiscal cost of NIC relief for salary sacrifice—projected to almost triple by the decade’s end—and to bolster fairness, as many employees have no access to salary sacrifice at all. Opposition parties countered that the plan would deter saving, increase expense and administrative complexity for employers, and could, over time, depress pension contributions. The Bill cleared its Second Reading by 312 votes to 165 (Division 395) and will now advance under an agreed programme...

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