Adam Gibbs
Workplace Pension Specialist
Watch Drewberry’s Adam Gibbs explain the key Budget changes affecting workplace pensions and where employers can still make meaningful improvements.
Following the latest autumn Budget (November 2025), many employers are asking what is changing for workplace pensions and how to make meaningful improvements without unnecessary cost. This session is a post Budget refresher for employers who want to improve workplace pension outcomes for employees while keeping costs under control.
It covers the basics of workplace pensions, why they matter more than ever as an employee benefit, what the Budget means for salary exchange, and practical actions employers can take in 2026 and beyond. The focus is on clear, compliant workplace pension education, rather than financial advice, with examples that show how small structural improvements can deliver meaningful results for both employers and employees.
Short on time? If you’re unable to watch the full webinar, we’ve summarised the key takeaways below so you can quickly understand what’s changed and what actions may be worth considering.
So as I said, this is really just a refresher on how to boost your workplace pension savings following the Budget last week. So just to introduce myself, my name’s Adam Gibbs. I’m one of the senior workplace pension consultants here at Drewberry, which is part of Brown and Brown Health and Employee Benefits.
Some names on the call today that I’m familiar with working with you, so thank you very much for joining, and also some new names, so lovely to be in contact with you all.
Legal Note 🤓
Before getting into the detail, a quick legal note. Brown & Brown Health and Employee Benefits is authorised and regulated by the Financial Conduct Authority. You can find us on the FCA register there with our number. However, certain products and services are not regulated by the Financial Conduct Authority, one of which is workplace pensions, as well as other benefits listed below, such as employee assistance programmes, occupational health, and benefit platforms.
What I want to cover today, first of all, is a refresher on workplace pensions and the key things employers need to know. I will then talk about pensions as an employee benefit, the impact of the Budget on workplace pensions, and in particular salary exchange. I will also explain how salary exchange works, which I appreciate some of you might already know, and why it’s still worth considering and how you can still make savings in 2026 and beyond. As I said at the start of the call, we’ll have plenty of time at the end for questions and answers.
So just a bit of a refresher on workplace pensions. As I’m sure all of you are aware, they are required by law. They enable your employees to save for their retirement whilst they work. Employers and employees make monthly contributions, which are invested, allowing the pension pot to hopefully grow in value to their selected retirement age. As of right now, pensions can be accessed from the age of 55, however from April 2028 that is increasing to age 57. So workplace pensions are a benefit.
We conduct a survey every year here at Drewberry, and one of the things that keeps coming up and is becoming more popular is pensions. It’s really great to see that employees are starting to take their pension schemes far more seriously. A common theme I see is employees starting to take their pension seriously in their mid to late thirties, which can be slightly too late.
This year’s survey shows that:
This highlights how important it is to ensure your pension scheme is competitive, not only to retain existing staff but also to attract new talent. Most employees would increase their own pension contributions if their employer matched them, and enhanced pension contributions are currently the third most wanted benefit in the market.
I’ve set out some cost effective ways to increase contributions, broken into three main areas.
Following the Budget, there are no immediate changes to salary exchange workplace pensions. It continues until April 2029, meaning there are still more than three years of potential savings. From April 2029 onwards, salary exchange is not removed entirely but capped at £2,000 per employee per year for National Insurance savings.
This limits employer National Insurance savings to £300 per employee per year. Employees can still contribute more than £2,000 via salary exchange, but contributions above that level will not attract additional tax savings and will be treated under the traditional method.
Salary exchange works by employees giving up part of their salary in return for higher employer pension contributions. For example, if an employee earns £100,000 and wants to contribute 5%, £5,000 of salary is exchanged. The employee’s salary becomes £95,000, and the employer pays an additional £5,000 into their pension. The money still goes into the same pension pot, just in a different way, creating National Insurance savings for both employer and employee. In some cases, it can also help employees fall into a lower tax threshold, depending on income.
Salary exchange involves a contractual change, and there are two ways of implementing it, either as a default opt out approach or an opt in approach. At Drewberry, we generally recommend the default method, as it is easier to manage and makes onboarding new employees simpler. Education and communication are essential, because employees need to understand why their basic salary is reducing and how the arrangement benefits them.
Salary exchange remains well worth considering. Employers continue to save on National Insurance contributions, and employees also benefit compared to making personal contributions. With tax thresholds frozen, salary exchange can help offset rising costs and improve take home pay or pension savings.
To illustrate the savings, I’ll share some examples. A company with 50 employees earning an average salary of £30,000, with employee contributions of 5% based on qualifying earnings, could save just under £9,000 per year in employer National Insurance.
A company with 100 employees earning an average salary of £50,000, contributing 5% based on basic salary, could save £37,500 per year before April 2029. After April 2029, savings reduce for higher earners but remain significant.
Education and communication play a big role in improving outcomes. Many employees are under saving for retirement. Over half of retirees with defined contribution pensions are projected to struggle financially, with the average pension pot in the UK standing at just over £20,000. A pension pot of around £63,000 is needed for a minimum lifestyle on top of the full state pension. Small increases can make a big difference, such as saving an extra 1% in your twenties, matched by your employer, which could increase your pension pot by around 25% by retirement.
Money worries remain one of the biggest causes of employee stress, with many employees saying it affects productivity at work. Employers can support financial wellbeing through education and guidance, without providing regulated financial advice.
I encourage employers to ask themselves when they last reviewed their workplace pension arrangements, how their scheme compares with similar organisations, whether employees truly understand the pension they have, and how the scheme is being communicated. If employees are not asking questions, it is often because they do not fully understand the benefit. It is also worth considering whether contributions are being made in the most tax efficient way via salary exchange.
At Drewberry, we support employers by reviewing and benchmarking pension schemes, managing provider switches, implementing salary exchange, and handling employee communications. We can also take on ongoing scheme management and act as a point of contact for employees. A key part of our role is supporting engagement through workshops, one to one guidance sessions, and dedicated telephone or email support.
A recent case study demonstrates the impact of this approach. A client had remained with their original auto enrolment provider without review as the business grew. After reviewing the market, the employer switched provider, introduced salary exchange as the default method, reduced annual management charges, and introduced matched contributions up to 7%. As a result, 40% of employees increased their contributions, and the employer achieved National Insurance savings of just under £22,500 per year.
That covers the key points I wanted to share today. Although the Budget included many announcements, workplace pensions and salary exchange remain an effective way for employers to improve outcomes for employees while managing costs, provided schemes are reviewed regularly and communicated clearly.
As the discussion from our webinar has show, a workplace pension is an essential part of employment and a key employee benefit for employers to implement. But there’s a lot to consider and many rules and regulations to follow. We know that setting up a pension can be a time-consuming task, so we have a team of workplace pension specialists to help you with the process. Especially when you add in new rules from the budget.
If you’re looking to review or set up a new salary sacrifice arrangement, our team can help. Get in touch with us today by calling 02074425880 or emailing us at help@drewberry.co.uk.
Employee benefits can be a headache. But our specialists do this day-in, day-out, offering first class service when you need it most. Here’s why you should talk to us:
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