Personal pension contributions can be used to reduce your taxable income. Basic rate taxpayers receive an extra 20% on their eligible contributions, and it’s 40% for higher rate taxpayer and 45% for additional rate taxpayers. What’s more, investing into a pension may help higher earners bring their income below the additional rate tax threshold of £125,140.
*It is possible to contribute enough to bring income below the higher rate band and relief would not be at the full 40%.
Personal pension contributions can be used to reduce your taxable income. Basic rate taxpayers receive an extra 20% on their eligible contributions, and it’s 40% for higher rate taxpayer and 45% for additional rate taxpayers. What’s more, investing into a pension may help higher earners bring their income below the additional rate tax threshold of £125,140.
*It is possible to contribute enough to bring income below the higher rate band and relief would not be at the full 40%.