After attendees at the SPP event had heard from a panel of expert speakers about the costs and benefits of salary sacrifice, they were asked what they think should happen next.
Nearly two thirds of respondents (62%) indicated they would like the reforms scrapped compared to only 5% who agreed with the government that the reforms should be implemented in their current form.
Nearly a quarter (24%) opted for the reforms to be implemented but in a different form and just 9% chose the option, “Salary Sacrifice for pension contributions should be abolished altogether.”
SPP member Steve Hitchiner, who chaired the event, said: “This industry polling reveals strong support for rethinking these reforms, which is not a huge surprise given the changes will result in higher costs to employees – including over 850,000 basic rate taxpayers - and employers, along with less pension saving when more saving is needed.
Salary sacrifice has long been an effective way of helping both employers and employees maximise pension contributions while reducing National Insurance costs. Restricting the NIC exemption from 2029 risks undermining those benefits and could discourage some employers from continuing to offer salary sacrifice arrangements altogether.
While there was recognition from some attendees that reform may be necessary, this SPP polling shows there is little appetite for the proposals in their current form. With a new Prime Minister and new Chancellor, the government should take this opportunity to engage with the pensions industry to explore alternative approaches that achieve its objectives without reducing incentives to save for retirement or placing additional financial burdens on workers and employers."
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