HMRC publishes report on IFF Research on attitudes and behaviours of employers towards salary sacrifice for pensions

Article summary

HM Revenue and Customs (HMRC) has published a report based on research by IFF Research into employers’ views on salary sacrifice for pension contributions. The study, undertaken from 30 May–3 August 2023 with 50 in-depth interviews involving HR and finance professionals, has examined the motivations for using the arrangement, its administrative effects, and the possible influence of changes to National Insurance and tax rules. Employers using salary sacrifice have indicated that the arrangement is straightforward to manage, provides notable National Insurance savings for both employer and employee, and contributes to employee retention and recruitment. In contrast, employers not using the arrangement have pointed to additional administrative requirements, a limited grasp of the associated benefits, and challenges for smaller businesses. The research also outlines three scenarios involving adjustments to tax and National Insurance exemptions, with responses ranging from mixed to predominantly negative when additional costs are...