The November 2025 UK Budget introduced targeted pension changes primarily affecting higher earners, including a salary sacrifice cap effective April 2029. Thistle Initiatives' Investments Team has outlined the key takeaways on pensions.
As much mooted before the budget, pensions have again been a target for the Chancellor, although the announced changes have been generally targeted towards higher earners.
- A cap on salary sacrifice of £2000 for member contributions will come into force in April 2029. This was based on the main beneficiaries of such measures being high earners sacrificing their bonuses.
- Indexation on pre-1997 pension benefits paid under the PPF and FAS.
- Those only in receipt of BSP or the New State Pension will not pay tax, even though tax thresholds for tax are frozen.
- Under the triple lock, the New State Pension and Basic State Pension will increase by 4.8%.
- The British Coal Staff Superannuation Scheme investment reserve fund will be transferred to members.
- The restriction on Class 2 voluntary national insurance contributions and the qualifying period for overseas residents.
Thistle Opinion
Overall, the changes to the pension landscape are not as extensive as suggested. There is no change to the rates of pension tax relief or tax-free cash lump sums. The change to salary sacrifice will make pensions a less attractive option for employees, but the delay in the implementation of the new limit to April 2029 should allow companies to ensure that payroll systems are appropriately amended and give some breathing room for scheme members to plan for the change.
How Thistle Initiatives Can Help
At Thistle Initiatives, we help firms stay ahead of regulatory change by strengthening their compliance frameworks. Whatever area of financial services you are involved in, we offer tailored support that’s practical, proportionate, and effective.
If you’d like to discuss how we can support your firm in light of the Budget changes, get in touch at info@thistleinitiatives.co.uk, or call 020 7436 0630 to speak with our team.
