Business
Salary sacrifice: Pension tax break reduced by chancellor
Some pension savers will face a hit to the amount of money they can put into their pension without paying national insurance (NI), under measures announced in the Budget.
From 2029, there will be a cap of £2,000 per year that can be shielded from employer and employee NI contributions by using a method called salary sacrifice.
There is currently a much higher limit to the amount a worker can agree their employer to pay in, with the scheme seen as a way to encourage workers to pay into their pensions.
The measure will raise £4.7bn in extra NI contributions in 2029, the Office for Budget Responsibility (OBR) has estimated.
Salary sacrifice lets workers and employers agree an amount to be taken out of pay and shifted into a pension before the salary is hit by National Insurance Contributions (NICs) and income tax. Workers “sacrifice” a higher salary, but receive a tax-free sum into their pot, with each pay cheque.
Chancellor Rachel Reeves said the current system favoured high-income earners and those who work in financial services, “who can put their bonuses into pensions tax-free”.
The £2,000 cap on salary sacrifice was a “pragmatic step”, Reeves said, and would mean low and middle-income earners could continue to use the scheme “without paying any more in tax”.
The salary sacrifice policy also reduces the overall amount of employer National Insurance Contributions (NICs) that companies pay, so any cap will mean a higher NICs bill for companies or a rethink on whether they offer the perk.
The cap will mean salary sacrifice contributions above £2,000 will incur NICS for both staff and companies. Workers paying income tax at the basic rate will pay NICS at a rate of 8%, while higher rate taxpayers will pay 2%. Employers pay NICs at a rate of 15%.
About a third of private sector employees and a tenth of public sector workers use a salary sacrifice scheme for their pension savings. Analysis by HM Revenues & Customs suggested about 7.7 million employees used it in 2024.
Former pensions minister Steve Webb, now partner at LCP, said that the time until National Insurance payments are due on salary sacrifice, more than three years away, means it is unlikely the chancellor will raise the £4.7bn the OBR estimates.
“The decision not to implement this change until 2029 creates a huge opportunity for firms to restructure the way that they offer pay and pensions in order to mitigate or eliminate this new charge,” Mr Webb said.
“There is a high probability that this policy will only raise a fraction of the amount expected by the chancellor.”
Baroness Ros Altmann, also a former pensions minister, said the current salary sacrifice system was “opaque” because it is based on agreements between individual companies and workers to each reduce their tax liability, but the proposed changes “will add to that”.
“There’ll be extra National Insurance costs for employers, lower take-home salaries potentially and then there’s the administration costs of any change in pension policy.
“Employers may just think the administration costs of changing this isn’t worth it and scrap the whole thing,” she added.
“Overall, I’d say this is a net-negative in terms of getting the UK saving more.”
Others in the pensions industry suggested the removal of the tax break could lead to companies reducing planned pay rises and contributing less to pensions overall.
“Expect to see employers reining in their contributions,” said Alex Foster, a Partner at Blick Rothenberg.
Business
US stock market: Wall street crashes amid Iran tension; Dow jones slips over 900 points, Nasdaq dips by 2% – The Times of India
A fresh wave of global selling pressure hit Wall Street on Tuesday, as escalating tensions involving Iran deepened fears of prolonged economic disruption. The S&P 500 fell 1.8 per cent in early trade. The Dow Jones Industrial Average was down 907 points, or 1.9 per cent, as of 9:35 am Eastern time, while the Nasdaq Composite dropped 2.1 per cent. The renewed slide came just a day after US equities had erased steep early losses to close marginally higher — a rebound that had hinged on oil prices remaining contained. That relief faded as crude surged closer to levels that investors fear could reignite inflationary pressures. Brent crude, the global benchmark, jumped 8.2 per cent to $84.14 a barrel after trading near $70 less than a week ago. US benchmark crude rose 8 per cent to $76.92. Oil prices spiked after Iran struck the US Embassy in Saudi Arabia, broadening its list of targets to include areas central to global oil and natural gas production. Markets are particularly focused on the Strait of Hormuz, a strategic chokepoint off Iran’s coast through which roughly one-fifth of the world’s oil supply passes. Any disruption there could have outsized consequences for global energy markets. Uncertainty over the duration of the conflict is adding to volatility. US and Israeli strikes have already killed Iranian Supreme Leader Ayatollah Ali Khamenei, yet US President Donald Trump has indicated that hostilities could persist for weeks. In a late-night social media post on Monday, Trump said wars can be fought “forever” with the munitions available to the United States. The sharp rise in crude threatens to compound inflation, which remains elevated, by increasing fuel and transportation costs. According to data from motor club AAA, the average US gasoline price rose 11 cents overnight to about $3.11 per gallon.On Wall Street, airline stocks extended losses amid concerns over higher jet fuel costs and travel disruptions linked to the conflict. United Airlines fell 4.1 per cent, American Airlines declined 4 per cent and Delta Air Lines slipped 3 per cent. Bond markets also reflected rising inflation expectations. The yield on the 10-year US Treasury climbed to 4.10 per cent from 4.05 per cent late Monday and 3.97 per cent on Friday. Higher yields translate into more expensive borrowing costs for households and businesses, affecting everything from mortgages to corporate bond issuances.The impact in equity markets has been most pronounced in sectors and countries heavily reliant on energy imports. In South Korea — a major oil importer — the Kospi index plunged 7.2 per cent in its worst session in nearly two years as markets reopened after a holiday. Japan’s Nikkei 225 fell 3.1 per cent, despite analysts noting that Japan maintains strategic energy reserves estimated to last more than 200 days.
Sign at the main entrance to a Best Buy store in Venice, Florida.
Erik McGregor | Lightrocket | Getty Images
Best Buy posted mixed results on Tuesday as the retailer’s holiday-quarter sales declined and missed Wall Street’s expectations, but its earnings topped estimates as it showed improved profitability.
For the current fiscal year, the consumer electronics retailer expects revenue to range between $41.2 billion and $42.1 billion, compared with $41.69 billion in the most recent fiscal year. It expects adjusted earnings per share to range from $6.30 to $6.60, after it reported adjusted earnings per share of $6.43 for the previous fiscal year.
Best Buy anticipates that comparable sales, a metric that tracks sales online and in stores open at least 14 months, will range from a decline of 1% to an increase of 1%.
In a news release, CEO Corie Barry said demand for consumer electronics remained lackluster during the gift-giving season, but the company’s internal data indicates that Best Buy’s market share in the industry “was at least flat.”
Chief Financial Officer Matt Bilunas said in his own statement that the company is “excited about the momentum in our business.” But he added that company leaders “expect to continue to navigate a mixed macro environment.”
Shares jumped more than 10% in premarket trading.
Here’s how the retailer did for the fiscal fourth quarter compared with what Wall Street was expecting, according to a survey of analysts by LSEG:
- Earnings per share: $2.61 adjusted vs. $2.47 expected
- Revenue: $13.81 billion vs. $13.88 billion expected
In the three-month period that ended Jan. 31, Best Buy’s net income jumped to $541 million, or $2.56 per share, from $117 million, or 54 cents per share, in the year-ago quarter. Excluding one-time expenses, including charges for its health business, Best Buy reported adjusted earnings per share of $2.61.
Revenue decreased from $13.95 billion in the year-ago quarter. Yet on an annual basis, revenue rose to $41.69 billion from $41.53 billion in the prior fiscal year. Best Buy’s annual revenue declined in the three previous fiscal years.
For about four years, Best Buy has pinned its slower sales on more price-sensitive U.S. consumers, a slower housing market and less tech innovation. All of those factors have caused some shoppers to delay tech purchases, particularly big-ticket items like new refrigerators. Higher tariffs have also added costs for Best Buy, since many consumer electronics are imported.
Comparable sales dropped 0.8% in the fourth quarter as the company saw softer sales of appliances and home theaters. Those declines were partially offset by sales growth in computing and mobile phones, the company said.
Best Buy has leaned into more profitable businesses, including selling ads and offering more merchandise through its third-party marketplace, which launched in August. Barry said in the company’s news release that Best Buy’s advertising partners nearly doubled compared to the prior year and she said the retailer has significantly increased the number of available products on the marketplace.
The company has a scheduled earnings call at 9 a.m. ET.
Last Updated:
Wall Street futures fell up to 2% Tuesday amid West Asia tensions and rising oil prices. Asian markets also declined, with Japan down 3.06% and South Korea’s KOSPI down 7.24%.
Wall Street Futures Sink as Oil Rally Clouds Rate Outlook
Wall Street futures tumbled up to 2 per cent on Tuesday morning, pointing to a weak start for US markets as rising tensions in West Asia unsettled global investors. The spike in crude oil prices has renewed concerns over inflation at a time when markets were hoping for stability in interest rates. The risk-off mood was visible across equity futures, with traders cutting exposure to technology and broader market indices.
E-mini Nasdaq-100 Futures dropped more than 2 percent to 24,519.50 USD, down 505.75 points from the previous close of 25,025.25. The contract touched a low of 24,370.00 after opening at 25,002.75, indicating sharp early selling pressure. Volumes remained elevated at over 1.63 lakh contracts, suggesting active repositioning by investors amid heightened volatility.
Meanwhile, E-mini S&P 500 Futures declined 1.48 percent, or 102 points, to 6,786.25 USD. The index futures slipped from a previous close of 6,888.25 and hit an intraday low of 6,742.75.
Asian markets witnessed sharp selling pressure on Tuesday as escalating tensions in West Asia and rising oil prices rattled investor sentiment across the region.
Oil Futures Spike
Crude oil prices surged sharply, with Crude Oil rising by 4.777 dollars, or 6.71 percent, to trade at 76.007 dollars per barrel.
Meanwhile, Brent crude jumped 5.482 dollars, or 7.05 percent, to 83.222 dollars per barrel, reflecting strong upward momentum in global energy markets.
Asian Markets Bleed
Japan’s benchmark index plunged 3.06 percent to close at 56,279.05, down 1,778.19 points from the previous close of 58,057.24. The index opened at 57,729.80 and slid to an intraday low of 56,091.54, reflecting broad-based weakness.
Meanwhile, South Korea’s KOSPI saw an even steeper decline, tumbling 7.24 percent to 5,791.91. The index opened at 6,165.15 and dropped to a low of 5,791.65, marking one of its sharpest single-day falls in recent months.
Early signals for Indian markets remained weak, with GIFT Nifty (earlier known as SGX Nifty) pointing to a sharp gap-down opening. As of 5:52 PM IST on March 3, the index was trading at 24,461.0, down 531.5 points or 2.13 percent.
The contract opened at 25,375.0 but quickly came under pressure, slipping to a low of 24,247.0 during the session. The steep decline mirrors the broader global sell-off triggered by rising tensions in West Asia and a spike in crude oil prices, which have heightened concerns over inflation and foreign fund outflows in emerging markets like India.
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March 03, 2026, 17:58 IST
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