18 November 2025, LONDON –

An average earner who is currently putting away a recommended 15% on a salary sacrifice pension scheme (12% personal and 3% employer contributions) could lose £215 from their yearly take-home pay with the new £2,000 cap, according to new analysis by personal finance comparison site Finder.

The new policy, set to be introduced in April 2029, would see someone on take-home pay of £52,270 impacted most, losing £341.80 per year if they contributed 12% and their employer 3%. This is a result of the national insurance rate being 8% up to the higher tax threshold and 2% thereafter.

If that person contributed 20% total via salary sacrifice (17% personal and 3% employer), they would see their annual take-home pay go down by a significant £550.87.

Experts recommend saving at least 15% into your pension for a healthy retirement pot, especially if you are 30 or older. There are concerns that the cap will discourage people from saving from retirement.

Someone on a salary of £39,039 – the UK’s average in 2025 – would see the same difference in take-home pay from the salary sacrifice cap (£215) as someone earning just over £106,000 a year and contributing the same percentage of their salary.

Meanwhile, someone on a salary of £75,000 a year saving the same amount as the examples above will only see their take-home pay reduced by £140 as a result of the salary sacrifice cap.

George Sweeney, investing and pensions expert at personal finance comparison site Finder, said:

“For a Budget where the broadest shoulders are supposed to bear the biggest burden, it’s surprising that regular working people – basic-rate taxpayers and middle-earners – will take the worst hit on their take-home pay with the new salary sacrifice cap.”

“7.7 million workers in the UK contribute to their pensions via salary sacrifice, so it’s not just a small number of wealthy individuals who are taking advantage of the scheme to save for their retirement”

“I am concerned that introducing this new £2,000 salary sacrifice threshold could skew the long-term pension savings habits among ordinary people, as some may opt to reduce their contributions to avoid paying this extra NI or at least minimise its impact.”