Pension savers have less than three years left to take full advantage of a popular tax perk that could turbocharge their retirement nest egg by tens of thousands of pounds before the Chancellor caps the valuable loophole.
Rachel Reeves is cracking down on the amount workers can pay into their pensions via popular ‘salary sacrifice’ schemes, in a £4.7billion pensions raid that could leave 2.9million of us with less money in retirement, new data revealed on Monday.
The scheme allows workers to forego wages in return for the money being paid directly into their retirement fund, reducing the amount of National Insurance (NI) paid by both workers and their employers.
Last November, the Chancellor announced during the Autumn Budget that contributions made via these schemes without incurring NI contributions will be capped at £2,000 a month from April 2029.
But anyone who has an employer that offers these schemes can still make full use of them by making uncapped contributions before it’s too late – and boost their pension by hundreds of thousands of pounds.
