National Insurance Contributions (Employer Pensions Contributions) Bill Committee: New Clause 5

Parliament voted on 21 January 2026 to reject New Clause 5 of the National Insurance Contributions (Employer Pensions Contributions) Bill, proposed by the Liberal Democrats. The clause would have required the government to calculate and publish the impact of the salary-sacrifice pension cap on people's lifetime pension values, both before and after the policy took effect. The result was 195 in favour and 317 against, so the clause fell. The bill, which has since become law, applies National Insurance contributions to salary-sacrifice pension arrangements where the amount sacrificed exceeds £2,000 a year, taking effect from the 2029-30 tax year. New Clause 5 would have obliged ministers to assess and disclose how this cap would alter the long-term value of affected savers' pension pots. Supporters argued that without such an assessment, Parliament and the public could not properly judge the consequences for retirement adequacy. The government opposed the requirement, arguing that the £2,000 threshold leaves 95% of those earning less than £30,000 unaffected, that a four-year lead-in gives savers and employers time to adjust, and that strong tax incentives for pension saving remain in place. The vote divided sharply along party lines. All 282 Labour MPs and 31 Labour and Co-operative MPs who voted opposed the clause, providing the majority needed to defeat it. The Conservatives (98 ayes), Liberal Democrats (65 ayes), Scottish National Party (8 ayes), Democratic Unionist Party (5 ayes), Plaid Cymru (4 ayes), Reform UK (4 ayes), and most independents voted in favour. There were no cross-party rebels recorded. The result reflects the government's position that the bill, in its existing form, is already a pragmatic and proportionate approach to reforming salary-sacrifice NICs relief.