"Chancellor Rachel Reeves has delivered a bruising second Budget, confirming more than £30 billion in tax rises and abandoning earlier assurances that "working people" would be shielded from higher taxes. Instead, she told MPs she was asking "everyone to contribute", with most households now set to be worse off and middle-income families bearing the brunt. While welfare payments, pensions and minimum wages will rise, a broad package of tax increases - combined with frozen thresholds - means millions will see their disposable income fall further."
"One of the most significant changes is the cap on National Insurance relief for salary-sacrificed pension contributions. From April 2029, only the first £2,000 of annual contributions will be exempt - a sharp shift from the current unlimited allowance. For someone earning £50,000 and contributing 5%, this equates to an estimated £75 a year in additional tax; for a £100,000 earner, around £450. Employers, who also lose NI relief, face even greater costs and may respond by lowering their own pension contributions."
More than £30 billion in tax rises have been confirmed, with a stated expectation that everyone must contribute. Most households will be worse off and middle-income families will bear the largest burden. Welfare payments, pensions and the minimum wage will be increased, but a broad package of tax increases combined with frozen tax thresholds will reduce disposable incomes for millions. A cap on National Insurance relief for salary-sacrificed pension contributions will limit exemptions to the first £2,000 from April 2029, increasing tax bills for many workers and raising costs for employers. Long-term pension savings may be reduced if employer contributions fall.
Read at Business Matters
Unable to calculate read time
Collection
[
|
...
]