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

The Commons voted on 23 March 2026 to reject a Lords amendment to the National Insurance Contributions (Employer Pensions Contributions) Bill that would have raised the salary-sacrifice pension threshold from £2,000 to £5,000 per year. The motion to disagree with Lords Amendment 1 passed by 280 votes to 161, keeping the government's original £2,000 cap intact. The bill applies Class 1 National Insurance contributions to amounts of salary sacrificed for employer pension contributions that exceed £2,000 per year, with effect from the 2029-30 tax year. Contributions below that threshold remain free of NICs. The Lords had sought to raise the cap to £5,000, arguing the lower figure would erode in real terms through inflation and discourage pension saving. By rejecting that change, the Commons preserved the government's tighter limit. The measure affects employees whose employers offer salary sacrifice pension schemes and who contribute more than £2,000 annually via that route. The vote divided sharply along party lines. All 276 Labour and Labour and Co-operative MPs who voted backed the government's position. All 88 Conservative MPs who voted opposed it, as did all 54 Liberal Democrats, 6 SNP members, 5 DUPs, 4 Reform UK, 2 Plaid Cymru, and 1 Traditional Unionist Voice MP who voted. Four Independents voted with the government, three against. There were no notable cross-party rebellions on the government benches. The division sits within a broader cluster of government-versus-Lords votes on pensions legislation during early 2026, including several contested divisions on the Pension Schemes Bill in April.