Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the salary sacrifice cap policy announced in the Autumn Budget 2025 on employee hours worked in (a) the private sector and (b) the public sector.

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice.

The Office for Budget Responsibility’s (OBR) November 2025 Economic and Fiscal Outlook (EFO) sets out that there is not expected to be a material impact on labour supply from this measure. The OBR also do not expect a material impact on savings behaviour as a result of Budget 2025 tax changes.

The government supports all individuals to save into pensions through a generous system of income tax and NICs reliefs worth over £70 billion a year.