Today’s Budget makes pensions more tax efficient for employers

After all the speculation about reductions in pensions tax relief, today’s Budget will actually make pensions provision more tax efficient for employers than salary or other benefits, according to LCP Senior Consultant Tim Camfield.

He said:

“After months of speculation of a “tax raid” on pensions, the overall impact of today’s Budget is to make pension provision more tax efficient for employers relative to salary or other benefits. Those that don’t yet make use of salary sacrifice for employee pension contributions should consider doing so, and those that do should consider further opportunities, like bonus sacrifice.

"More flexibility on death benefits may also be attractive. These simple steps can be good for both employees and employers, reducing NI payments, securing a better retirement and protecting financial dependants. A key focus is likely to be on whether lump sum death benefit options remain sufficient for workers.”