National Insurance Contributions (Employer Pensions Contributions) Bill: motion to disagree with Lords Amendment 3

On 23 March 2026, the House of Commons voted by 280 votes to 164 to reject Lords Amendment 3 to the National Insurance Contributions (Employer Pensions Contributions) Bill. The vote was one of a series taken on the same evening, in which the government successfully overturned a sequence of amendments the House of Lords had inserted into the Bill. Each of those related divisions produced similar results, with the government majority holding firm throughout.

The Bill changes the tax treatment of employer pension contributions made through salary sacrifice arrangements (a system where employees give up part of their salary in exchange for employer pension contributions, reducing national insurance liability for both parties). The Lords amendment sought to limit, delay, or create exemptions from the proposed changes, which will impose a cap of £2,000 on the amount of employer pension contributions through salary sacrifice that can benefit from national insurance relief. The government argued the existing relief is costly and in need of reform, pointing to the overall £70 billion annual spend on pension tax relief. Critics argued the change discourages retirement saving, particularly among low and middle-income workers, and imposes additional administrative burdens on smaller employers.

The vote divided along strict party lines. All 278 Labour and Labour and Co-operative members who voted backed the government. Every Conservative, Liberal Democrat, Scottish National Party, Democratic Unionist Party, Plaid Cymru, Reform UK, and Traditional Unionist Voice member who voted opposed the motion, producing a No total of 164. There were no notable cross-party rebels on either side. The result sits within a broader political argument about how the government funds public services, with the government framing the measure as responsible stewardship of tax reliefs and opposition parties contending it undermines pension saving incentives at a damaging moment for household finances.