National Insurance Contributions (Employer Pensions Contributions) Bill: motion to disagree with Lords Amendment 6

Parliament voted on 23 March 2026 to reject Lords Amendment 6 to the National Insurance Contributions (Employer Pensions Contributions) Bill, with 278 MPs voting in favour of rejecting the amendment and 164 voting against. The amendment, passed by the House of Lords, concerned the treatment of employer pension contributions made through salary sacrifice arrangements, and specifically sought to exempt small and medium-sized businesses and charities from the changes being introduced by the Bill. The government successfully overturned it, as it did with the other Lords amendments considered on the same day.

The Bill alters the tax treatment of employer pension contributions made via optional remuneration arrangements, commonly known as salary sacrifice schemes, under which employees give up a portion of their salary in exchange for employer pension contributions, reducing the national insurance paid by both parties. The government is imposing a cap of 2,000 pounds on the amount that can be contributed through such schemes before additional national insurance becomes payable, with the change due to take effect from 2029. Lords Amendment 6 would have shielded smaller employers and charities from this change. The government argues that tax relief on pension saving remains generous, that 95 percent of those earning 30,000 pounds or less and saving via salary sacrifice are unaffected by the cap, and that the reform is necessary to control costs that would otherwise rise to a level comparable to the entire defence budget. Critics contend that the change discourages pension saving, places administrative burdens on small businesses, and could widen the existing pensions gap.

The vote divided almost entirely along party lines. All 275 Labour and Labour and Co-operative Party MPs who voted supported the government's position. Every Conservative, Liberal Democrat, Democratic Unionist Party, Scottish National Party, Plaid Cymru, Reform UK and Traditional Unionist Voice MP who voted opposed it. Two independents voted with the government and two against. This was one of twelve Lords amendments the government moved to reject on the same day, and the voting pattern was consistent across all of them, with margins ranging from 114 to 118.