National Insurance Contributions (Employer Pensions Contributions) Bill: Second Reading
312Ayes
165Noes
Carried · majority 147 · Government won172 did not vote
649 Members · Aye 312 · No 165 · DNV 172 · grey dots in centre are abstentions
Analysis
Commons
Commons
Parliament voted on 17 December 2025 to give a Second Reading to the National Insurance Contributions (Employer Pensions Contributions) Bill, meaning the Bill passed its first full parliamentary debate and moved forward for further scrutiny. The result was 312 votes in favour and 165 against. A Second Reading is the stage at which MPs debate the general principles of a Bill before it proceeds to detailed line-by-line examination in committee. The Bill creates a power to apply National Insurance contributions (NICs) to salary sacrifice pension contributions above £2,000 per year, with the change due to come into force from April 2029. Salary sacrifice is an arrangement where an employee agrees to reduce their gross salary, with the difference paid directly into their pension, meaning neither the employee nor the employer pays NICs on that portion of pay. The Bill would cap the NIC relief available through this mechanism. The government projects the measure will raise approximately £7 billion over the forecast period, while ministers argued that without action the cost of salary sacrifice relief would have reached £8 billion per year by the end of the decade. The £2,000 annual threshold is intended to protect lower earners, with ministers arguing that 60 percent of contributions through the scheme come from the top fifth of employees. The vote divided almost entirely along party lines. Labour and Labour and Co-operative MPs voted unanimously in favour, joined by the four Green Party MPs and three independents. Every Conservative, Liberal Democrat, Reform UK, Scottish National Party, Plaid Cymru, and Ulster Unionist MP who voted did so against. There were no notable cross-party rebellions in either direction. The Bill sits within the broader context of the government's autumn 2025 Budget and is described by ministers as a companion piece to the Finance Bill debated the previous day.
Voting Aye meant
Support applying National Insurance to employer pension salary sacrifice arrangements above £2,000 annually from 2029, closing a tax relief that disproportionately benefits higher earners
Voting No meant
Oppose extending National Insurance to pension salary sacrifice, arguing it increases costs on businesses and workers and undermines pension saving incentives
Each row is one party. The stacked bar gives the within-party split of Aye / No / Absent; the columns on the right give the raw counts. The whip column shows the published party position — “Free vote” means the whip was formally removed for this division.
Party
Whip
Aye / No / Abs
Aye
No
Abs
Labour Party
Whipped Aye
271
0
90
Conservative and Unionist Party
Whipped No
0
91
25
Liberal Democrats
Whipped No
0
60
12
Labour and Co-operative Party
Whipped Aye
31
0
11
Independent
—
3
2
8
Scottish National Party
Whipped No
0
4
5
Reform UK
Whipped No
0
6
2
Sinn Féin
—
0
0
7
Democratic Unionist Party
—
0
1
4
Green Party of England and Wales
Whipped Aye
4
0
0
Plaid Cymru
Whipped No
0
3
1
Social Democratic and Labour Party
—
0
0
2
Alliance Party of Northern Ireland
—
0
0
1
Restore Britain
—
0
0
1
Speaker
—
0
0
1
Traditional Unionist Voice
—
0
0
1
Ulster Unionist Party
—
0
1
0
Your Party
—
0
0
1
Source · Hansard · UK Parliament Votes API · whip status from announced positions; “free vote” indicates the whip was formally removed
The cap is necessary, pragmatic, and fair; salary sacrifice costs are exploding (to £8bn/year), benefits disproportionately flow to high earners, and the policy protects 95% of those earning under £30k while giving businesses nearly 4 years to adjust.Labour · Voted aye · Read full speech (3,039 words) →
This is a £4.8bn tax raid on savers that contradicts the government's own financial inclusion strategy; it will discourage pension saving when adequacy is a crisis, hits middle-income earners disproportionately, and creates administrative chaos for 290,000 employers.Conservative · Voted no · Read full speech (3,188 words) →
The policy creates a double whammy: short-term revenue for the government but long-term pain for savers; 40% of people are already unlikely to invest in pensions, and the measure adds to business burdens already from energy costs and previous NI hikes.Liberal Democrat · Voted no · Read full speech (447 words) →
Labour has broken its manifesto pledge not to raise NI; the CBI and ABI warn this is a tax on doing the right thing that will damage growth and pension saving; behavioural changes may mean far less revenue than the OBR forecasts.SNP · Voted no · Read full speech (808 words) →
The Bill taxes aspiration and penalizes prudence; it discourages savings at exactly the wrong time and will disproportionately burden women returning from maternity leave who seek to catch up contributions.Conservative · Voted no · Read full speech (642 words) →
Another anti-aspiration measure that breaks Labour's tax pledge; the OBR figures appear inflated by timing to maximize 2029-30 revenue; the policy worsens private-sector pension security compared to public-sector gold-plated schemes.Conservative · Voted no · Read full speech (967 words) →
The cap is fair targeting of a £75bn-per-year relief; low-wage workers cannot access salary sacrifice anyway, so they are unaffected; the long implementation gives businesses time to plan and the OBR costing is dynamic and robust.Labour · Voted aye · Read full speech (1,279 words) →
Raises serious concerns about cost-of-living pressures on small businesses already facing utility increases of 52.7%, labour costs up 51.5%, and taxes up 47.2%.DUP · Voted no · Read full speech (89 words) →
Sources
Division dataUK Parliament Votes API
DebateHansard · Commons
Stance analysisAI analysis · Claude 4.x
LicenceOpen Parliament Licence v3.0