Managing your pension scheme this tax year end – let’s prepare together

Good morning, everyone, and welcome to our first webinar of 2026. I'm Abbie Shaw, a Marketing Manager at Royal London, and I'm delighted to have you with us today.

We run these sessions every quarter to bring you fresh insights, practical guidance and topics that we hope will truly support you as employers.

In today's webinar, we'll discuss the salary exchange changes, reminding you of the October 2024 Budget changes and breaking down those announced in the November 2025 Budget. We'll also walk you through a range of useful resources, as well as covering the key tasks and deadlines for the 2026 tax year end.

Don't worry about scribbling everything down. After the session, we'll send you a follow-up e-mail with all the materials we cover, including the slides and a link to the recording of this webinar, so you can revisit any of the information whenever you need to.

Let's kick things off by meeting our experts who'll be guiding you through today's session. First up is Justin Corliss, our Technical Marketing Team Manager. Justin began his career in financial services back in 1997 in Australia, and he's never looked back. These days, he's known for bringing pensions to life, whether he's shaping industry thought leadership, writing for the trade press or delivering complex topics in a way that makes everything click.

And following Justin, we'll hear from Thomas White, a key part of our Workplace Pensions Servicing Team. Thomas is often the very first voice that employers, members and advisers hear when they contact Royal London. He's worked here since 2023, so has a good level of knowledge and understanding in this area.

Together we'll walk you through today's topics with plenty of insight, clarity and real world experience.

We've got a packed and useful agenda lined up for you today, all designed to help you navigate tax year end with confidence.

And I know tax year end often feels like a whirlwind, but with the right preparation and a clear plan, it becomes a chance to tidy things up, support your employees, and even unlock new benefits along the way. So we'll walk you through a range of key topics, breaking everything down so you'll hopefully leave feeling informed, equipped, and a little ahead of the curve.

And to wrap things up, we'll finish with the Q&A, which includes several of the great questions that you've sent in beforehand.

Just before we begin, I'll add that the information provided during today's webinar is based on our current understanding of the relevant legislation and regulations. So remember, this could change in the future. We know there's a spring statement later on, so it'll be interesting to see what is said there too. But let's get started. Over to you, Justin.

Right. Thanks, Abbie. And hi, everyone. I'm Justin, as Abbie kindly introduced me from the Technical Marketing Team here at Royal London. Great to have you with us. Right, let's dive straight in, shall we?

I want to spend a couple of minutes talking about changes to salary exchange, both those outlined in the November 2025 Budget and a reminder of the changes in the October 2024 Budget as they've also got some relevance here too. Now the impact of using salary exchange, also commonly known as salary sacrifice - I'm not too bothered what you call what you call it really. But the impact of using that for pension contributions is the National Insurance saving that's made.

Employees pay employee National Insurance at 8% between the primary threshold that's £12,570 and the upper earnings limit that's £50,270 and above that they pay 2% National Insurance. Now employers also have to pay National Insurance on the salaries that they pay to their employees. Now this is slightly more straightforward. Everything above the first £5,000 of salary paid to the employee incurs a flat rate of employer National Insurance at 15%. There's no ceiling to that, which is why I say it's a little bit more straightforward.

So given this, let's have a quick recap of the changes announced in the October 2024 Budget to help provide some context to the changes announced in the November 2025 Budget.

Now I think all of this highlights the challenges that some employers have faced over the last few years.

So, beginning with the changes announced in the October 2024 Budget, the Employer National Insurance rate increased from 13.8 to 15% and in addition, the threshold at which an employer needed to begin paying employers National Insurance contributions decreased from £9,100 down to £5,000. And you know that reduction in threshold alone means that employers National Insurance bills have increased by £615 per employee per annum. Now, as you can see on the slide, these changes took effect from the 6th of April 2025. So they're still pretty new, I would say, and many employers will still be getting used to these increased costs.

So, that brings us back to the November 2025 Budget and the change to salary exchange. Now from April 2029, National Insurance savings will be restricted to the first £2,000 of salary exchanged for pension contributions.

Now, to be honest, we actually feared the worst as we thought that the Government might remove salary exchange altogether based on a research and analysis document published by HMRC in May 2025. There are actually three options proposed in that paper and this one, that they're moving forward with, was certainly the least worst option. So I just wanna take some time to think through some of the implications of this change.

The £2,000 cap is likely to result in reductions to pension contributions in some instances, but there will still be some significant advantages to continuing with salary exchange, even in excess of that £2,000 National Insurance cap after April 2029.

Now in HMRC's policy paper, they normally put one of these out just after the Budget - this one came out on the 4th of December 2025. They said an estimated £7.7 million employees currently use salary exchange to make pension contributions. Of these 3.3 million exchange more than £2,000 of salary or bonuses. That means that 44% of employees using salary exchange for pensions would be impacted by this measure. Flip side of that I suppose is that around 56% or if you prefer around 4.3 million are fully protected by that £2,000 threshold. Of course, what that doesn't take into account is pay increases in the future. OK, as pay increases, so will pension contributions and more and more people will be impacted by that £2,000 limit.

Now this measure is expected to impact 290,000 employers who operate salary exchange arrangements for pension contributions and who will now need. or who will in 2029. need to collect and pay National Insurance on amounts exchanged above £2,000. But as I say, that's only after April 2029, that's not in force at the moment.

Now, on a slightly brighter note, OK, we need to be aware of the change to the Employment Allowance. Now that's the level of National Insurance that employers have a liability for but don't have to pay. Now the Employment Allowance lets eligible employers reduce their National Insurance liability by up to £10,500. Prior to the 6th of April 2025, this was only available to employers whose total National Insurance bill for the year fell below £100,000. And if that was the case? They wouldn't have to pay the first £5,000 of the National Insurance that they would otherwise have been liable for. However, from the 6th of April 2025, the Employment Allowance increased from £5,000 to £10,500 and is available to all eligible employers. So that means it will now be available, and is now available, to employers with a National Insurance bill over £100,000 too.

Now, I do just think it's important that we clarify at this point that salary exchange isn't being limited to £2000. It's just the National Insurance savings for employees and employers that are limited to the first £2,000 exchange and that's quite significant.

As salary exchange enjoys benefits in excess of just the National Insurance saving, and I'm gonna run through a couple of those just now.

So although only the first £2,000 exchanged will benefit from National Insurance savings, exchanging beyond this figure will reduce taxable income and potentially keep an individual below a tax threshold, or perhaps keep them out of tax traps. If you're not familiar with that term, tax traps are bands of income where the effective rate of tax exceeds the headline rate. An example of that could be if Child Benefit, for example, is being lost because the highest earner in a household is earning £70,000. So they're exchanging £10,000 of salary even though only £2,000 benefits from the National Insurance saving will reduce the adjusted net income to £60,000 recouping the otherwise lost Child Benefit.

Now another benefit of salary exchange beyond the National Insurance saving is the ability to secure tax relief beyond 20% at source and for this relief to go into the pension fund. Now when the relief at source system is being used, that's the system that you'll be using - 20% tax relief is given at source, and anything above this needs to be claimed from HMRC by the scheme member. Now, as well as some people neglecting to claim that relief, OK, those that do, usually get this relief in the form of an altered tax code. So while the tax relief is received, it doesn't necessarily go into the pension plan unless the scheme member makes a manual contribution. Using salary exchange enables the scheme member to get their full marginal rate of tax relief into their pension fund without needing to claim anything from HMRC.

Actually, just on that point about people neglecting to claim tax relief back, I've seen research suggesting as many as half the people eligible for further tax relief fail to claim it. Now for any of you who have employees who pay income tax in Scotland, remember they have four tax bands higher than that 20% figure, so they should be claiming the additional rate of tax relief back.

The importance of securing tax relief beyond 20% at source shouldn't be overlooked. Uh, take a higher rate taxpayer exchanging £10,000 above the £2,000 cap. OK, if currently all National Insurance savings are redirected to the employees’ pension scheme the changes in 2029 will reduce the pension contribution by £1,700 - 15% employer, 2% employee, 17 percent, 17% of that £10,000 is £1,700.

But you know, cancelling the salary exchange arrangement as a result and operating a standard relief at source system could see this scheme member missing out on higher rate tax relief going into their pension. Yes, they could claim it back from HMRC and pay it into their pension, but not all will. And if they don't, their pension pot at the point of taking benefits will be lower as a result. Now with widespread reports of pension underfunding, even at higher income levels this is of significant concern.

A further reason to maintain salary exchange arrangements post April 2029 is that many employees simply won't be impacted by the proposed changes. The average full-time adult salary in the UK is approximately £35,000 per annum. A worker contributing a fairly standard 5% employee contribution within an automatic enrolment scheme would see their gross contribution, which is how much they exchange, as £1750 and therefore within the cap.

In fact, the Budget document that came out just after the Budget, claims that 74% of basic rate taxpayers will be shielded by that £2,000 cap.

Now I also want to take a second to highlight the potential impact on employers, especially those who to date have used their National Insurance savings for ancillary benefits and whether they're going to maintain these benefits. Remember, employers currently have the choice of redirecting employer salary exchange savings - OK, so their National Insurance savings into the employees’ pension fund or retaining it within the business, perhaps to fund ancillary benefits that I talk about.

Now post April 2029 savings above the threshold will disappear. Now if the employer was redirecting those savings into the member's pension, then presumably the pension contribution will reduce. This will impact the employee, the member of the scheme, but doesn't have a direct impact on the employer. However, if the employer was retaining these savings within the business, possibly to fund ancillary benefits or for some other use, then post April 2029, the employer is going to experience a funding shortfall as a result of these changes and that's something that will require planning and decisions to be made in the run up to April 2029. And you know financial advisors can be a big help with that.

OK, now for your convenience, uh, here's a table outlining the National Insurance impact on a 5% employee pension contribution at different salary levels pre and post April 2029. So if we look at that first column at a salary of £35,000, you can see there is no additional National Insurance cost for either the employee or the employer, and that's because the amount being exchanged is below the £2,000 cap being introduced in April 2029. So nothing changes for that person.

Looking at the at the next column along there at a £45,000 salary, a 5% employee pension contribution would be £2,250. So £250 over the proposed cap. So £2,250 can still be salary exchanged, but the last £250 won't get that employee National Insurance saving of 8% of £250. Which you can see is £20 on there, nor the employer National Insurance saving of 15%, which as you can see is £37.50.

Once we look along at the next column, OK, so we look at the £70,000 salary which would be a £3,500 pension contribution at 5%. We need to remember that at that level the Employee National Insurance rate is only 2% because it's above that £50,270 mark. So the cost to the employee actually isn't as great. OK, it's 2% on the £1,500 above the £2,000 cap. You know £1,500 plus £2,000 gets to the £3,500 thousand. And as you can see, that's £30. OK. For the employer though, it's still 15% on the amount exchanged above £2,000, which is £225.

And finally, OK, if we look at the last column at £100,000, the impact on the employee is £60 per annum, so £5 a month. The costs are higher for the employer however, and of course this is on top of recent increase in the National Insurance for employers and the reduction in the threshold and that comes in at £450.

So, to summarise this section, yes, the cap on National Insurance savings proposed for April 2029 has the potential to impact pension contributions. However, using salary exchange will still mean that the scheme member will get full marginal rate tax relief at source. They won't have to claim it back from HMRC, which they might neglect to do. It all goes into their pension, which might not be the case without using salary exchange. The £2,000 cap will cover many workers, so they'll see no change. And of course it's still three years off, so still plenty of time to take advantage of the current salary exchange arrangements, if you're not already.

Worth having a word with your financial advisor that you deal with about that.

OK, that's all from me. I'm going to pass you back over to Abbie to take you through the next section.

Thanks, Justin. That's so informative. We're now going to move on to explore the practical ways that Royal London can support you as employers as we head into this tax year end. And there's lots we have available to make it as simple as possible for you.

We've got a strong line up of support and resources which are constantly evolving. On screen we've got the key tools that Royal London can offer to help you manage this tax year end and I'll chat through each one in a little more detail.

As we said, we know that tax year end can feel hectic, so we've created a dedicated employer tax year end hub which is packed with readymade resources to save you time and help you support and engage your employees with ease.

I'll share my screen now to walk you through it.

So what you'll find inside includes Year-end tasks. We've created a brand new key task and deadlines list to help you take control. That's your go-to guide for all the key actions and dates that you need to stay on track. Thomas will also explain these for you soon.

We've also created a short video explaining why tax year end is a great opportunity to spark conversations with employees about their pensions and investments.

We then come to One-off contribution options. So this is support for everything you need to process one-off contributions or any bonus exchange that you may offer in the dashboard. Our Help Centre has expert tips and tools on making contributions and videos on how to do it, which you can follow.

And also this year we've got a new bonus exchange support page. This is clear, straightforward and really focused on how bonus exchange works and the benefits for both you as employers and for your employees. We know this is something that some of you have previously asked for more information on.

There's Employee engagement, so this section has content for you to share with employees. There's e-mail templates, posters, banners, e-mail footers, all designed to raise awareness and drive action.

And then finally, Additional resources. So in this section you can dig deeper into topics including bonus exchange, understanding the benefits of tax relief on pension contributions and our Stocks and Shares ISA, which I'll go into a little more detail shortly.

I'll now move on to walk you through our Communications toolkit, where other year-round helpful resources are located.

If you've joined us before on one of these webinars, you'll already be aware of our Communications toolkit. It's your go-to space that's packed with everything you need to talk confidently about pension basics, tax, our mobile app, financial well-being, and even our ISA.

With tax year end approaching, there's just a few key ones to pull out, which may also be useful alongside those on the hub that we've already covered.

So within our Making pension contribution section of the toolkit, it's worth looking at the following, which you can also see on screen.

There's readymade e-mail templates on one off contributions, so we do see an uplift in activity this time of year with employees choosing to make additional single contributions. So we've created copy and paste e-mail templates that you can use instantly to share with your employees about topping up their pension, whether someone wants to make a one off or pay some or all of their bonus into their pension.

We also have a range of case studies which were popular last tax year end. We've got a range for both salary exchange and relief at source schemes, and these look at the impact of increasing regular contributions or choosing to pay a one-off bonus or contribution into your pension and these are based on a range of salaries, so £27,000, £55,000 and £125,000 and they show in a simple and visual way the power of increasing contributions and the fact that even a small uplift 1-2% increments, these can make a big difference over time.

And also the hidden value of paying a bonus into a pension. Most employees don't realise just how tax efficient this can be, and when they see the potential savings side by side, the benefits do become really clear. So you may wish to see which of these case studies would resonate most with your employee demographics and share it with them to bring it to life.

We hope the toolkit gives you everything you need to start useful conversations and help your employees make the most of their pension.

As I mentioned, last year we launched our Stocks and Shares ISA. That gives your employees even more choice in how they invest their money. With this ISA, they get a tax efficient way to invest, the same competitive annual management charge they already enjoy with their workplace pension and flexible ways to build their savings at a pace that suits them.

Your employees can automatically access our Stocks and Shares ISA and apply directly with us and make the most of the £20,000 ISA allowance before it resets on the 6th of April if they wish to. Again, there's content if you want to let your employees know about this in the toolkit, poster, e-mail banner and our dedicated ISA hub. There's also guides on the difference between pensions and ISAs and saving versus investing, which can help address the key questions people have.

One of the key benefits that we provide to your employees is our relatively new monthly member webinar, and these are available to every single member across Royal London pension schemes and are delivered live every month so people can join the one that works for them. They're designed to do two really important things.

Firstly, breakdown the basics of pensions in a clear, straightforward way. And secondly, show members the digital tools and online support available to help them really engage with their Royal London pension. As I mentioned, these sessions are open to all members. They're particularly valuable for any new joiners that you may have, but also some members just might want a refresher and they're really interested now in engaging with their pension.

In terms of format, they're short, sharp and engaging. They last just 30 minutes and we finished with a live Q&A with one of our pension experts, so members can ask the questions that matter to them. And what's great is members love them. We've had great feedback and on average attendees rate our webinars 4.5 out of five, which tells us they're genuinely helpful and valued.

Again in our Communications toolkit, you'll find an e-mail to use to invite your employees to sign up to one. You can see that the next one we're running is on Tuesday the 31st of March at 11:30am.

We also offer quarterly customer webinars to help your employees get to grips with their pension savings. There is in fact a session this Thursday. It's called Navigating Tax at End and it sees pension expert Claire Moffat and our consumer finance specialist Sarah Pennells breakdown how to make the most of the pension, annual allowance and ISAs. They'll cover the key tax benefits, how ISAs work, and what to know about the ISA allowance. Plus they'll take the time to answer any questions which should be pre-submitted in the registration form.

After today's session, we'll send a follow-up e-mail that includes direct links to both of the registration pages for these webinars, so we'd really encourage you to share these links with your employees. It's a really simple way to help them feel more confident, informed and in control of their pension.

And moving on to our last tool, we have our Online service dashboard videos page, and here you'll find a collection of short, practical videos designed to help guide you through the busiest time of the year. Each section focuses on a key part of managing your pension tasks smoothly and confidently.

So how can these help at tax year end? Well, we've got Making contributions. This quick walkthrough shows you exactly how to make a pension contribution step-by-step. It highlights the must remember details to keep your monthly submissions accurate and on time. Updating your payroll. This one shows you how to make payroll updates like when someone opts in, remains opted out, has recently become eligible to join your scheme. Payroll updates should always be done after you've assessed your workers and then Managing your workforce. This video demonstrates how to keep your workforce information fully up to date. It explains how to tell us about changes to workers names, addresses, salaries, e-mail addresses helping you stay clean, tidy and ready for tax year end.

Now, we're going to move on to the key dates and essential information that you'll need as we head towards tax year end, especially since it falls on a bank holiday weekend this year. Thomas, I'm now going to hand over to you to take us through that, please.

Thank you, Abbie. Good morning everybody. My name is Thomas. I'm here to help you navigate the key tasks and considerations as we approach this tax year end. For single contributions made this tax year, we must receive the applications and supporting documentation along with the payments, whether made by bank transfer or cheque, no later than 6:00 PM on Thursday the 2nd of April 2026.

A key reminder here is that employer single contributions must never be made as part of your monthly upload as these are counted as regular contributions. Instead, please make single contributions separately via the BACS method. And confirm the payment using our contact us form or emailing your usual servicing team. Your confirmation should include the payment details, the members details and a breakdown of how the payment was made.

Your employees can save time using our workplace pension submission portal to securely upload application forms, any supporting documentation.

Alternatively, your employees can also print and post application forms with supporting documentation to Royal London.

Just bear in mind that bank holidays and postal delays may affect timings.

If you're aiming for this year's ProfitShare, it's worth noting and bearing in mind that we have to have these before the 1st of April.

For regular monthly contributions to be included by the 1st of April, these must be submitted by the 31st of March and the direct debit will be then taken on the 3rd of April. Any contributions received after the 1st of April will be counted towards next year's award which will then be aimed to be added by the 30th of April 2027. Pension plans and ISAs must have been in force before the 31st of December the previous year.

If you're applying to make some contribution payments for your employees, the quickest and most reliable method is the bank transfer. Just remember to include your scheme number as the payment reference so we can match it correctly.

If any employee has already submitted a single contribution through the workplace pension submission portal, they still need to complete the process by sending the payment via bank transfer to Royal London or via cheque. The details for the bank transfer can be found at the top right hand corner of the application form page. For cheques, the postal address can be found on the screen above.

We must receive all application forms and supporting documentation and payments, whether by bank transfer or cheque, by 6:00 PM on Thursday the 2nd of April 2026.

Thanks, Thomas. We're now going to take a look at the questions that you have kindly submitted in advance. I'll be asking these on your behalf and Thomas and Justin will help me provide the insights and answers.

So we have some on salary exchange and Justin, I'll come to you first on this. Do you think the Budget changes, influence the attractiveness on salary exchange to employers.

Um, look, as I've outlined, earlier on, despite the National Insurance rate increase and the upcoming 2029 cap on National Insurance saving, salary exchange does remain an attractive arrangement for employers. It's just that the benefit will shift slightly overtime, but for the next three years, if you're not set up for salary exchange, certainly worth exploring that option further and worthwhile talking to a financial advisor about that.

Yeah, brilliant. I was gonna say another question was, how do I find out more about switching to a salary exchange arrangement?

Well, yeah, in the first instance, it's best to speak with a financial advisor. They can guide you through your options. Um, we can also add a link, in our thank you e-mail, I think that that follows, you know, today's session, to our webpage about setting up salary exchange to an existing scheme. That's got a lot of great resources for all the employers to take a look at.

Yeah, definitely a great place to start. Thank you.

Thomas, on tax your end support and making those contributions, what happens if that 6:00 PM deadline is missed that you mentioned?

Yeah. So if the 6:00 PM deadline is missed, then any contributions received after this will be counted as next year's tax year. This means that we would apply for 2027 and not obviously this current tax year. The best way to prevent this is obviously making the payment as early as possible and also following our key list of best actions to take just to get these payments in on time.

Great, thank you. Can the status of a contribution be tracked once it's been sent?

Yes, so the member, or well the employer, in this instance particularly can log into the online services, go to member information, then go to contributions paid. Select from the drop down menu all contributions. This will then show any single contributions as well. If the single contribution is still not currently showing, that just means it's still currently in progress.

Great, thank you. Who is best to contact if a payment has been made incorrectly?

If the payment method has been made incorrectly, best to get in contact with your servicing team. You best to do it through e-mail or there's also the telephone number as well.

Great. Thank you.

It's a good question. What are some of the most common year-end mistakes that you see?

So the most common ones are the missing references and also sending the contributions too late to the tax year and it then unfortunately falling into the next tax year because it's been submitted too late. So again, just making those payments as quickly and in advance as possible, but also making sure you're checking the checklist and if you have any questions, obviously contact Royal London to stop any pitfalls.

Great. Thank you.

We've got one here on, are there any materials that we can share directly with employees? So I'm happy to answer that one.

Absolutely. I think we've covered a lot of those today. Our toolkit is absolutely the place to go with the leaflets, videos, emails, guides that I've talked about. These can all be shared via e-mail. You could host them on your intranet or as part of your onboarding materials, whatever works best for you.

There's also a question on is there a summary that we can share with the HR or payroll team?

And I think again on the tax year end hub there is that employer checklist that Thomas has mentioned and other documents that are perfect for HR or payroll colleagues and you can also share the webinar slides internally, so you'll get all of these in the follow-up e-mail.

We also have a question on ISA. So Justin, I might ask you this one. How do ISA’s sit alongside pension contributions at year end?

ISAs and pensions serve different needs. ISAs don't receive tax relief, but they do offer flexible, accessible, which is really important, savings. Pensions are tax efficient, long-term savings. Um employees you know, may choose to contribute to both depending on their goals, and our support materials help outline those considerations and the key points to be thinking about in either instance.

Great. Thank you.

And then ProfitShare, Thomas, you mentioned this. When will we know if employees have received a ProfitShare award?

Yeah. So any ProfitShare reward is based on the value of the pension or ISA on the investments based on the date of the 1st of April 2026.  Will confirm the awards directly to the member and this will reflect on their policy value once applied as well.

Great. And does ProfitShare apply to both pensions and ISAs? If you could just clarify that one.

Yes, it does. So it does apply to both. And again, it's just based on the qualifying factor. Was it in place on the 31st of December, the year before, and if it was, then they will be eligible and it will then show up on the 1st of April.

Great. Thank you. And I will just add that we are very close to announcing our ProfitShare and how much we'll be sharing with our eligible members this year. So do you keep an eye out for that in the coming week?

I think that wraps up the Q&A.

Yes. So that's us, folks. Thank you so much for joining and thank you to everyone who's participated today. Your knowledge, guidance and insights have been invaluable. We hope you've enjoyed the session and picked up some practical tips to make managing your scheme at tax year end feel smoother, simpler and a lot less stressful.

As promised, we'll follow up with an e-mail containing all the resources mentioned during the webinar, including the full recording and slides, so you can revisit everything at your own pace and share it with any colleagues.

Remember that our employer website is packed with helpful tools and guidance. You'll find everything from the tax year end hub to our comms toolkit and our Help Centre and plenty of materials to help you stay organised and keep your employees informed. If you have any further questions or need additional support, please don't hesitate to contact us.

Thanks again for joining today's session and we hope to see you at our future webinars. Thank you.