What the Autumn Budget Means for Your Pension Plans
- Callum Dunbar
- 4 minutes ago
- 3 min read
With the arrival of the 2025 Autumn Budget, the government has introduced several changes to how pensions will work in the UK - including a major shift to the way salary-sacrifice pension contributions will be treated. For anyone saving for retirement or currently investing into a pension, it’s more important than ever to understand what’s changing and to review your strategy accordingly.
What Has Changed
From April 2029 - Salary-Sacrifice Pension Contributions Hit by NI Charges
The government has confirmed that from April 2029, any pension contributions made via salary sacrifice above £2,000 per year will cease to be exempt from National Insurance (NI).
For employees (and employers), contributions over that £2,000 threshold will be subject to regular NI contributions.
For many savers - especially higher earners who currently use salary sacrifice to reduce their tax and NI burden — this is a notable change. It may reduce the attractiveness of using salary sacrifice as a retirement-saving strategy under the current arrangements.
Pension Tax Relief & Allowances Remain - But Time to Act If You Can
The Budget does not abolish pension tax relief or significantly alter the basic framework: personal pension contributions still benefit from tax relief, subject to the usual annual allowance (for most people up to £60,000, subject to earnings and certain limits).
But with the upcoming salary-sacrifice changes, those who rely solely on salary sacrifice may see reduced benefit in the future.
Why Now Might Be a Good Time to Review Pension Contributions
Because the salary sacrifice cap doesn’t come into effect until 2029, there remains a window of opportunity to maximise pension contributions under the existing favourable tax/NI arrangement.
If you have spare capacity, increasing pension contributions now, via standard personal or employer contributions (not salary sacrifice), might still allow you to benefit from full tax relief.
What This Means for Different Types of Savers
If you are… | You should consider… |
An employee using salary-sacrifice for pension contributions | Reviewing your projected pension contributions post-2029 and considering whether to shift to personal/employer contributions instead of salary sacrifice. |
A higher earner contributing heavily to pensions | Locking in as much tax-relieved pension savings as possible before April 2029, especially if your pension strategy relies on high contributions. |
Self-employed or using personal pension contributions | Continuing as normal — current rules remain favourable, but worth re-evaluating contribution levels in light of wider Budget changes. |
Planning retirement or long-term financial goals | Ensuring your pension strategy remains appropriate for your risk tolerance, retirement income needs, and tax-efficiency. |
What CPW Recommends - A Simple Action Plan
Review your current pension contributions and method - are you using salary sacrifice? What happens if you continue beyond 2029?
Use the window until 2029Â - if you have capacity, consider increasing pension contributions while the current rules still fully apply.
Diversify retirement savings - don’t rely solely on one pension method or vehicle; consider ISAs, investments, and other tax-efficient wrappers as part of a wider plan.
Plan for long term - make sure pension contributions and retirement projections reflect likely changes in tax and NI legislation.
Get tailored advice - pensions are complex and personal. If your income, tax, or employment circumstances are changing, talk to an adviser to confirm the best strategy for you.
The 2025 Autumn Budget has not removed pension tax relief, but it does signal a clear shift, especially for those using salary sacrifice. With the proposed NI cap kick-in in 2029, pension savers need to be more forward-looking, more deliberate, and more strategic than ever.
At Cleveden Park Wealth, we’re ready to help you review your pension arrangements, explore the best route forward in light of these changes, and make sure your retirement plan remains robust, efficient, and aligned with your goals.
Contact us if you’d like to discuss, review or update your pension plan - the earlier we act, the more options you retain.