National Insurance Contributions (Employer Pensions Contributions) Bill: motion to disagree with Lords Amendment 1

Parliament voted on 23 March 2026 to reject Lords Amendment 1 to the National Insurance Contributions (Employer Pensions Contributions) Bill, by 280 votes to 161. The amendment had been passed by the House of Lords and represented the upper chamber's primary challenge to the bill's central measure: applying national insurance contributions to employer pension contributions made through salary sacrifice arrangements, subject to a £2,000 annual cap per employee. By voting to disagree with the Lords, the government maintained its original policy intact.

The vote matters because it clears the way for a new tax on a widely used workplace pension saving mechanism. Under salary sacrifice, employees and employers jointly arrange for part of a worker's salary to be paid directly into a pension, a route that has historically been exempt from employer national insurance. The bill ends that exemption on contributions above the £2,000 cap, with the change due to take effect from 2029. Opponents argued the policy would discourage pension saving among low and middle-income workers, increase administrative burdens on small businesses and charities, and risk widening the pension gap over time. The government argued that all workers retain strong incentives to save for retirement, that the existing £70 billion-a-year tax relief system remains largely intact, and that the revenue is necessary to fund public services without cuts to the NHS or welfare.

The vote divided almost entirely along party lines. All 277 Labour and Labour and Co-operative MPs who voted supported the government, with no rebels. The Conservatives (88 votes), Liberal Democrats (54), Scottish National Party (6), Democratic Unionist Party (5), Reform UK (4), Plaid Cymru (2) and Traditional Unionist Voice (1) all voted against. Three independents voted on each side. The same pattern was repeated across four further divisions held on the same day, as the government rejected Lords Amendments 2, 3, 5 and 6 by similar margins, defeating a range of Lords proposals including exemptions for small and medium-sized enterprises and charities.