Nearly two-thirds of UK workers use salary sacrifice, but a similar share do not know that a change due in April 2029 will make it less generous. The system is already widely used to boost pension savings and trim tax bills, yet one in ten workers still do not know what salary sacrifice is at all.

The misunderstanding runs deeper than the headline number. One in five workers think salary sacrifice can only be used for pension contributions, even though it can also cover childcare vouchers and company car schemes. Nearly a third do not think it affects mortgage borrowing capacity, while 48% say they do not know whether it does. Another 15% wrongly believe salary sacrifice can push cash earnings below the national minimum wage.

Salary sacrifice is an agreement between an employee and an employer to give up part of cash pay in exchange for a benefit. The sacrificed amount never appears as taxable pay, and neither the worker nor the employer pays national insurance on it. Some employers pass their national insurance saving directly into a pension, which can make the arrangement more valuable than a standard contribution made from take-home pay.

Mark Futcher said the poll showed how casually people are using a system that affects their pay. He said that for a benefit so widely used, most people are still using salary sacrifice on autopilot and without knowing what is going on under the bonnet. That matters because the planned changes will come into effect from April 2029 and are expected to make the arrangement less generous.

The scale of the tax advantage is clearest for workers near key thresholds. Earners approaching £100,000 start losing their personal allowance, anyone above £60,000 loses child benefit, and anyone whose pay sits just above the higher-rate tax threshold pays 40% on the margin. For someone earning £105,000, sacrificing £10,000 into a pension would drop their declared salary to £95,000, with the £10,000 going in before tax or national insurance.

That is why salary sacrifice has become so common, and why it is not limited to pensions. Employees can use it for a pension and a cycle-to-work scheme at the same time if their employer offers both, but the employer decides which benefits are available. Workers can ask their employer to offer salary sacrifice, although smaller businesses may find the admin and compliance costs off-putting.

Marianna Hunt said the key difference is that the money goes in before either deduction, and that the national insurance saving is the part the standard route does not give you. She also said that if someone is interested in salary sacrifice and knows their company does not offer it, it is definitely worth having that conversation. But she added that people need to understand the trade-off too, because they are literally reducing their headline salary on paper.

That is the tension at the heart of the coming change. Salary sacrifice still gives workers a way to direct more of their pay into benefits before tax and national insurance, but the planned 2029 shift will take some of that edge away just as many employees are only now learning how the system works. For anyone using it near the £60,000, £100,000 or higher-rate thresholds, the question is not whether the mechanism matters. It is how much less generous it will be once April 2029 arrives.