The autumn budget: salary sacrifice pension contributions
5 days ago
A message from My Money Matters, our financial well-being partner:
The Government announced changes in the Autumn Budget that will affect how salary sacrifice pension contributions work from April 2029. We want to make sure you understand what's changing and, more importantly, what this means for your retirement savings.
What's changing?
From 6 April 2029, National Insurance relief on salary sacrifice pension contributions will be capped at £2,000 per year. While this doesn’t affect your main LGPS pension, this affects members in Shared Cost AVC (SCAVC) schemes.
From April 2029, contributions above £2,000 will still receive full Income Tax relief but will be subject to both employee and employer National Insurance contributions.
The good news: Nothing changes until 2029
Your SCAVC continues to operate exactly as it does today for the next three years. You'll continue to receive full National Insurance relief on all contributions, regardless of amount, until April 2029.
This extended notice period gives you time to plan and make informed decisions about your pension savings without any pressure.
What this means for you:
The next three years represent a significant opportunity. If you've been considering starting a SCAVC or increasing your SCAVC contributions, this is your window to benefit from full National Insurance relief before the cap takes effect.
Important: your main pension is unaffected:
This change only affects Additional Voluntary Contributions (AVCs) made through salary sacrifice arrangements. Your main Local Government Pension Scheme benefits are completely unaffected.
Ready to contribute to your future?
Our partner My Money Matters enable you to start and manage your Shared Cost AVC. It takes 10 minutes to get started and you can start with as little at £2 a month:
This information is for guidance purposes only and does not constitute financial advice. We recommend reviewing your personal circumstances and considering independent financial advice before making significant changes to your pension contributions.
We will continue to provide updated guidance as we approach April 2029 and keep you informed of any further developments.