National Insurance Contributions (Employer Pensions Contributions) Bill: motion to disagree with Lords Amendment 5

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 annual threshold for NIC-free salary-sacrifice pension contributions from £2,000 to £5,000. The government's motion to disagree with Lords Amendment 5 passed by 281 votes to 167, a majority of 114. The bill applies Class 1 National Insurance contributions to salary-sacrifice pension contributions that exceed £2,000 per year, taking effect from the 2029-30 tax year. By voting down the Lords amendment, the Commons kept the threshold at the government's original figure of £2,000. Salary sacrifice is an arrangement where employees give up part of their salary in exchange for employer pension contributions, reducing the NIC liability of both employer and employee. Critics of the £2,000 threshold argued it is set too low and will lose real value over time through inflation, hitting lower and middle earners who use the arrangement to save for retirement. Labour MPs voted unanimously for the government's position, providing all 271 of the ayes from the two Labour groupings. Conservatives, Liberal Democrats, the SNP, the DUP, Reform UK and Plaid Cymru all voted against, backing the Lords' higher threshold. No cross-party rebellion was visible among Labour members. The vote sits in a period of sustained parliamentary activity around pension policy, with several related divisions on the Pension Schemes Bill taking place in the weeks that followed.