HomeNewsNational Insurance Contributions (Employer Pensions Contributions) Bill: Consideration of Lords Amendments

National Insurance Contributions (Employer Pensions Contributions) Bill: Consideration of Lords Amendments

  • 23/03/2026
  • Posted by: Valerie Vaz MP
  • Category: News
The Bill returned to the House of Commons on 23 March 2026 after passing its third reading in the Lords as amended on 12 March 2026. 
From April 2029, a primary and secondary Class 1 National Insurance Contributions (NICs) charge will be applied where employer pension contributions are made via salary sacrifice arrangements that exceed £2,000. Salary Sacrifice contributions for pensions will continue to be free of income tax.

The changes made in this Bill do not affect employee pension contributions made via other pension arrangements which are already subject to Class 1 NICs. The existing income tax relief regime for pensions is unaffected by the changes introduced in this Bill, employer contributions can continue to be made NICs free, and existing NICs reliefs (e.g. for employees above State Pension age, and provision of the Employment Allowance) will continue to apply.

There were 5 amendments put to the vote and I voted to support the motions to disagree with the Lords amendments which were rejected;  
Lords Amendment 1, which would have exempted basic rate taxpayers in England, Wales, and Scotland from a Class 1 NICs liability on employer pension contributions made under salary sacrifice arrangements:  Ayes 280, Noes 161 
Lords Amendment 2, which would have exempted salary sacrificed employer pension contributions over the £2000 limit from being included in student loan repayment calculations, :  Ayes 279, Noes 167. 
Lords Amendment 3, which would have made the regulation making powers in the Bill subject to the Parliamentary approval, except those solely increasing the contributions limit, Ayes 280, Noes 164.
Lords Amendment 5, which would have changed the initial contribution limit to £5,000 in Great Britain, Ayes 281, Noes 167.
Lords Amendment 6, which would have exempted small and medium-sized enterprises, and small and medium-sized charities and social enterprises, from the provisions of the Bill in Great Britain, Ayes 278, Noes 164.
All amendments were rejected because they would alter the financial arrangements made by the Commons as the Commons have exclusive authority over financial matters. The Bill was returned to the House of Lords for further debate.