How will some workers’ pensions be affected by salary sacrifice changes?

Capping salary sacrifice for pension saving has been described as ‘a short-sighted tax grab which will lower pension saving.’

A £2,000 salary sacrifice cap on pensions, announced in the Budget, is a “tax penalty on people trying to do the right thing”, a pension expert has said.

Here is a look at how salary sacrifice schemes work and how they will change under a shake-up unveiled in the Budget:

– What are salary sacrifice schemes?

They allow people to “give up” a chunk of their salary for a different benefit from their employer.

Employers may offer salary sacrifice as part of their pension scheme as a tax efficient way to help workers boost their pots.

When someone pays into a pension using salary sacrifice, the employer will pay the whole amount into the employee’s pension, includin