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

Parliament voted on 21 January 2026 on Amendment 5 to the National Insurance Contributions (Employer Pensions Contributions) Bill at committee stage. The amendment, tabled by Conservative MP Mark Garnier, would have exempted basic rate taxpayers in England, Wales and Scotland from the new £2,000 annual cap on National Insurance Contributions-free salary sacrifice pension contributions, restricting the cap to higher and additional rate taxpayers only. The amendment was defeated by 326 votes to 191. The bill as a whole introduces NICs charges on employer pension contributions made via salary sacrifice arrangements above £2,000 per year, taking effect from April 2029. Had Amendment 5 passed, lower-earning workers paying the basic rate of income tax would have retained the ability to sacrifice unlimited salary into their pension without triggering NICs charges. The government argued the £2,000 cap already protects the vast majority of basic rate taxpayers, with Pensions Minister Torsten Bell citing that 95% of those earning under £30,000 would be unaffected. He also argued that exempting basic rate taxpayers would be difficult to implement because employers often cannot know which staff will end up as basic rate payers until late in the tax year. All 290 Labour MPs and 31 Labour and Co-operative MPs who voted went through the No lobby, with no crossover. The Conservatives, Liberal Democrats, SNP, DUP, Plaid Cymru, Reform UK and Traditional Unionist Voice all voted Aye, forming a broad cross-opposition front. No Labour MP voted for the amendment and no opposition party voted against it.