Salary sacrifice: max out this pension tax break while you can

The clock is ticking to take advantage of this valuable UK scheme, as the benefits are to be restricted from April 2029 Millions of workers are able to take advantage of a scheme that allows them to boost their pension and pay less tax, and experts are urging people to “max out” this valuable perk before the rules are tightened. Salary sacrifice lets you exchange some of your wages for a different benefit from your employer, such as a company car – or, in this case, pension contributions. You will then pay less tax and national insurance (NI) on your lower salary. This week a report warned that millions of people are not saving enough for retirement and that without action “too many risk facing a cliff-edge drop in income” when they stop work, so this is something many employees can do that will make a real difference. In the past few years there has been an explosion in the number of companies offering pension salary sacrifice as a benefit. However, the government has announced that from April 2029 it will restrict the benefits offered by these arrangements. That gives employees almost three tax years to make full use what’s on offer before the changes take effect, “so taking adva