Autumn Budget Update: Salary Exchange & Payroll Changes
The Autumn Budget confirmed a significant change to pension Salary Exchange rules that will take effect from April 2029. Under the new policy, any Salary Exchanged pension contributions above £2,000 per year will become subject to National Insurance (NI) charges. NI savings on the first £2,000 will remain, continuing to offer meaningful value to employers and workers when Salary Exchange is set up correctly.
What does this mean right now?
There is no immediate impact.
The changes will not apply until April 2029 — nearly three and a half years away.
During this time:
- Existing Salary Exchange arrangements continue unchanged
- Full NI savings remain available
- Employers and workers can still benefit from the current rules without restriction
For organisations not yet using Salary Exchange, the coming years represent a clear window of opportunity. Implementing or optimising Salary Exchange before April 2029 allows companies and employees to maximise NI savings while the current rules remain in effect.
Salary Exchange from April 2029
From April 2029:
- NI savings will apply only to the first £2,000 per year of salary exchanged
- Any pension contributions exchanged above £2,000 will attract standard NI charges
Importantly, this change does not remove the benefits of Salary Exchange.
For many workers, especially those contributing less than £2,000 per year, Salary Exchange will continue to deliver full NI savings.
To put this into context:
- A £2,000 annual pension contribution is equivalent to
5% of pensionable pay on a £40,000 salary
- Many employees contribute below this level, meaning the value of Salary Exchange remains fully intact for a large proportion of the workforce
Companies will still benefit from reduced employer NI on the first £2,000 exchanged per employee.
Other Key Measures Announced in the Autumn Budget
Freeze on tax thresholds
Income Tax and NI thresholds remain frozen. As earnings rise, more employees will gradually move into higher tax bands (fiscal drag).
Minimum wage changes from April 2026
- National Living Wage (NLW): rising by 4.1% to £12.71 per hour
- Ages 18–20: increasing to £10.85
- Ages 16–17: rising to £8.00
Student loans – Plan 2 threshold frozen
The repayment threshold stays at £29,385 until 2029–30.
State pension increase
The state pension will rise by 4.8% from April 2026, in line with average wage growth.
What this means for you — and how Husky helps
With full National Insurance savings still available for the next three years, now is an ideal time for employers to review or introduce Salary Exchange. The benefits remain strong — and Husky is built to make the entire process simple, compliant, and completely hassle-free.
Who is Husky for?
Husky is designed for people who want pensions done properly, without the admin burden.
If that sounds like you, you’re probably one of these:
- Small business owners who want compliance handled automatically
- HR and payroll teams tired of manual steps and chasing missing data
- Employers looking to reduce costs through Salary Exchange
- Accountants and advisers who want a dependable solution for their clients
No matter your role, Husky delivers the same outcome:
✔️ a pension system that just works.
Why businesses choose Husky
Businesses stay with Husky because it’s straightforward, reliable, and saves time and money every single month.
Here’s how:
- Effortless automation — Husky handles setup, monthly processing, and all compliance steps
- Guaranteed compliance — Automatic monthly checks ensure you always meet pension regulations
- Integrated payroll — Everything connects smoothly, reducing errors and admin
- Real savings — Smart Salary Exchange increases take-home pay and lowers employer NI costs
- Friendly support — Pension experts on hand whenever you need them
Once Husky is plugged in, it simply takes care of the rest.
Make the most of the next 3 years
The full NI savings available today won’t change until April 2029 — giving employers a valuable window to review pension arrangements and maximise the benefits while they last.
If you want to see exactly how much you and your team could save:
👉 Try the Salary Exchange Calculator
https://huskyfinance.com/services/salary-exchange/#salary-exchange-calculator
Husky will continue to monitor all new Budget guidance and share updates as they are released, ensuring your business stays informed, compliant, and ahead of every change.
Get started
Register with Husky to get started or have a chat with our team to understand the benefits.
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