National Insurance Contributions (Employer Pensions Contributions) Bill Committee: Amendment 5

Parliament voted on Amendment 5 to the National Insurance Contributions (Employer Pensions Contributions) Bill during its Committee stage on 21 January 2026. The amendment, moved by Conservative shadow minister Mark Garnier, proposed that the bill's £2,000 annual cap on tax-free salary sacrifice pension contributions should only apply to higher and additional rate taxpayers, thereby exempting basic rate taxpayers in England, Wales and Scotland from the cap entirely. The amendment was defeated by 326 votes to 191.

The bill as written creates a power to apply employer and employee national insurance contributions on salary sacrifice pension contributions above £2,000 per year, taking effect from April 2029. Salary sacrifice is an arrangement where employees give up part of their salary in exchange for employer pension contributions, reducing the national insurance they pay. The government argues the cost to the Treasury of these schemes was set to nearly treble by 2030, rising from £2.8 billion in 2017 to around £8 billion. Had Amendment 5 passed, basic rate taxpayers would have retained full access to salary sacrifice arrangements regardless of contribution size, narrowing the fiscal impact of the reform considerably.

The vote divided along near-perfect party lines. All Labour and Labour and Co-operative MPs voted against the amendment, providing the government's majority. Every Conservative, Liberal Democrat, Scottish National Party, Democratic Unionist Party, Plaid Cymru and Reform UK MP who voted supported it, alongside most independents. There were no notable rebels on either side. The defeat of this amendment was consistent with subsequent votes in March 2026, when the government also moved to reject several Lords amendments to the same bill, suggesting the legislation continued to face significant opposition in the upper chamber even after passing the Commons.