Baroness Stedman-Scott asked: “His Majesty’s Government what assessment they have made of the OBR’s assumption that, following the decision to apply National Insurance to salary-sacrificed pension contributions above £2,000, employers will pass 76 per cent of the additional cost to employees.”

Answering Lord Livermore revealed how many people will be affected by salary sacrifice changes to pensions and how much it is set to cost a year on average. He said: “Of the estimated 7.7 million employees who currently use salary sacrifice to make pension contributions, 3.3 million sacrifice more than £2,000 of salary or bonuses. This means 44% would be impacted by this measure, while 56% – around 4.3 million people – are fully protected by the £2,000 threshold. Of those with salary sacrifice contributions in excess of the cap, the average additional employee NICs liability is estimated to be £84 for the tax year 2029/30.

“The Office for Budget Responsibility’s (OBR) Economic and Fiscal Outlook (EFO) set out the estimated yield for this measure. Their assumption on passthrough is in line with assumptions for previous changes to employer NICs and is also reflected in the Government’s published costing note.

“This change applies to all employers who use salary sacrifice for pensions, regardless of whether they are public sector or private sector. Many public sector employers are prohibited from using salary sacrifice for pensions under the rules of “Managing Public Money.”

“The government supports all individuals to save into pensions through a generous system of income tax and NICs reliefs worth over £70 billion a year. This is the fairest way to support pensions saving whilst ensuring relief is targeted at those who need it most.”

Guidance published online by HMRC about the changes said an estimated 7.7 million employees currently use salary sacrifice to make pension contributions. Of these, 3.3 million sacrifice more than £2,000 of salary or bonuses.

Changes announced in the Budget will mean salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from national insurance (NI) from April 2029. Contributions above £2,000 will be treated as ordinary employee pension contributions in the tax system and subject to NI contributions.

Employers may offer salary sacrifice as part of their pension scheme as a tax-efficient way to help workers boost their pots. The schemes enable people to maintain their take-home pay, as people end up paying lower NI contributions.

The announcement in the Budget has been criticised by pensions industry bodies, who have argued many people are already thought to be heading for a tough time financially in later life.

Yvonne Braun, director of policy, long-term savings, health and protection at the Association of British Insurers (ABI), previously said “the wider work required to rebuild people’s trust in the stability of pensions will take years”.

People often dial their pension contributions up and down throughout their working lives, depending on factors such as their other financial commitments and outgoings, and how close they are to retirement.

The HMRC guidance said employees with salary sacrifice contributions are estimated to be of typical working age.

It said: “In particular, those who are aged 31 to 50 (52%) are estimated to be overrepresented compared to their prevalence in the employee population in general (44%).

“Males are also estimated to be overrepresented in the population making salary sacrifice pension contributions (59%) compared to their prevalence in the UK adult population (50%).”

The document also said: “This measure is expected to have an impact on 290,000 employers who operate salary sacrifice arrangements for pension contributions who will now need to account for relevant pension contribution amounts and report and pay class one national insurance contributions on these, where appropriate.

“One-off costs will include familiarisation with the change, the training of staff and updating of software. Continuing costs will include performing more calculations and recording and providing additional information to HMRC where salary sacrifice schemes continue to be used.”