A majority of voters appear to support the government’s plan to cap salary sacrifice pension contributions, according to new consumer research.
A poll conducted by research agency Public First found that more than twice as many people supported the government’s planned reforms to pension salary sacrifice, compared to those who opposed them.
From April 2029, salary sacrifice relief for pension contributions will be capped at £2,000 a year, as set out by chancellor Rachel Reeves in the Budget last year. This is despite strong opposition from the pensions industry and the House of Lords.
Public First polled more than 2,000 people and reported that 40% supported the salary sacrifice reform, while just 16% opposed it. However, more people (44%) were uncertain.
The poll question explained the salary sacrifice change and asked respondents which side they agreed with, stating: “Supporters say [the salary sacrifice cap] will reduce a tax break for higher earners and raise public funds, while critics say it may discourage pension saving and increase costs for employers and employees.”
Pensions UK: Real-world impact of salary sacrifice cap is being underplayed
The government’s proposed reforms to salary sacrifice may have been trailed as a targeted measure aimed at high earners, but the latest analysis from the Office for Budget Responsibility (OBR) suggests its impact will be far broader and far more disruptive than the official narrative admits, with workers paying the price. Read the views of Pensions UK’s Zoe Alexander.
Meanwhile, the same poll found the public to be broadly split on the issue of mandation – another controversial element of the government’s recent pension policy.
Respondents were given a choice between two competing statements representing each side of the mandation argument. The poll found that 44% of people supported the statement: “Pension providers should be required by the government to invest a minimum share of pension savings in UK businesses and projects, to support the British economy, even if that limits where they can invest.”
However, 42% agreed with the statement: “Pension providers should be free to invest pension savings wherever they think they will produce the best returns, even if that means investing mainly outside the UK.”
The survey also asked respondents which entities they trusted more with ensuring that pension savings grow and people have enough income in retirement. They were given a choice of the government, pension providers, employers, regulators, trade unions, and financial markets.
Providers came top with 21%, but 22% of respondents said they did not know. The government was trusted by just 15% of people, just ahead of employers (14%) and regulators (13%).
Public First also tested a range of policy statements linked to the Pensions Commission’s work. The most popular were extending auto-enrolment to include younger and part-time workers, and raising employer contributions. Increasing employee contributions and freezing the state pension age by raising taxes were the least popular options.
