Workers saving into a pension nowadays are often bearing the risk as to how much money they will end up with in retirement (Image: Picture posed by model/Lucy North/PA Archive)

A pension expert has labelled the £2,000 salary sacrifice cap on pensions, announced in the Budget, as a "tax penalty on people trying to do the right thing". These schemes allow individuals to "give up" a portion of their salary in exchange for a different benefit from their employer.

Employers may propose salary sacrifice as part of their pension scheme as a tax-efficient method to assist employees in enhancing their pension pots.

When an individual contributes to a pension using salary sacrifice, the employer will deposit the entire amount into the employee's pension, including the employer's contribut

See Full Page