Penfold has reported an significant jump in employers enquiring and switching to salary sacrifice pension options, in the wake of the rise in national insurance contributions.
The government raised employer NI rates at the last Budget, with this change coming into effect this April.
As a result, Penfold says interest from employers about this option has risen 800 per cent year-on-year, and 688 per cent in the last quarter.
At the same time the contributions to pensions via salary sacrifice grew 160 per cent year-on-year, and 53 per cent quarter-on quarter — the biggest quarterly growth the company has seen since 2022.
Although these are large percentage increases Penfold remains one of the smallest workplace pension providers administering just over £350m of assets. It now serves 1,200 business and 62,000 individual members.
Salary sacrifice can help reduce NI bills for employers and employees as this is not levied on pension payments.
CIPD figures show that 85 per cent of very large employers, 61 per cent of large companies and 41 per cent of SMEs now offer salary sacrifice pensions – but there is still some confusion in the market around how to offer this through workplace pension Given the rising interest in this option Penfold has launched a new guide on salary sacrifice aimed at both employers and advisers.
Penfold founder and CEO says: “Since the Budget, we’ve seen an unprecedented level of inbound interest from employers who are now facing much higher employment costs. Salary sacrifice pensions have gone from being a ‘nice-to-have’ to a strategic priority.”
Employers and advisers can access Penfold’s new salary sacrifice guide here.
